Will I Receive A Step-Up In Basis For This Gifted Property

In most cases, there is no step-up in basis when property is gifted. But there are a few exceptions and those exceptions can be difficult to remember.

To help make it 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 for a client trying to understand how their cost basis is impacted as a result of property they received as a gift. This flowchart considers:

• Double Basis Rules
• 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

This article represents opinions of the authors and not those of their firm and are subject to change from time to time, and do not constitute a recommendation to purchase and sale any security nor to engage in any particular investment or legal strategy. The information contained here has been obtained from sources believed to be reliable but cannot be guaranteed for accuracy.