Estate Tax
When the decedent passes away, their real estate becomes part of the estate. If the estate administrator (such as a child) sells the property, how should the tax basis be determined? Should it be the stepped-up basis or the carryover of the original basis? This article provides a rigorous interpretation of this issue based on U.S. tax law principles.
The home of a decedent became an asset of his estate upon his death. His three children are fiduciaries of the estate. If the estate sells the home, does the cost of the home receive a stepped up basis or is the original basis carried over to the estate when the estate was established?