I believe that this is the general rule:
If, in an inheritance, the assets being passed along count for estate tax purposes, then the basis is reset (stepped up or down depending on the value). If a trust is constructed so that the assets being passed along do not count for estate tax purposes, then the basis is not reset.
Some people expect to have large estates, may have to pay estate tax (after considering the large exemption), and want to avoid high estate tax rates, so they are willing to sacrifice the step up.
If, in an inheritance, the assets being passed along count for estate tax purposes, then the basis is reset (stepped up or down depending on the value). If a trust is constructed so that the assets being passed along do not count for estate tax purposes, then the basis is not reset.
Some people expect to have large estates, may have to pay estate tax (after considering the large exemption), and want to avoid high estate tax rates, so they are willing to sacrifice the step up.
Statistics: Posted by increment — Mon Jan 13, 2025 4:07 pm