Will I Receive A Step-Up In Basis For A Gifted Property?
In most cases, there is no step-up in basis when property is gifted. But there are a few exceptions to the general rule, which can be difficult to remember.
To help make this analysis easier, we have created the “Will I Receive A Step-Up In Basis For This Gifted Property?” flowchart. It addresses some of the most common issues that arise if you are trying to understand your cost basis in property you received as a gift. This flowchart considers:
Double basis rule
Impact if gift tax was paid by the donor
Situations where cost basis carries over
Situations where there is a partial step-up in basis
Situations where no gain or loss is recognized
Robert J. Pyle, CFP®, CFA, AEP® founded Diversified Asset Management, Inc., in 1996 to provide personalized, comprehensive wealth management services to successful individuals, families, single women, and business owners. His specialty is addressing the complex financial needs of self-employed professionals, corporate executives, and small-business owners. Our disclosure can be found here. The views, opinion, information, and content provided here are solely those of the respective authors, and may not represent the views or opinions of Diversified Asset Management, Inc. Diversified Asset Management, Inc. cannot guarantee the accuracy or currency of any such third party information or content, and does not undertake to verify or update such information or content. Any such information or other content should not be construed as investment, legal, accounting, or tax advice.