Stepped-Up Tax Basis on Inherited Securities
In the event that a taxpayer dies and his heirs inherit his securities positions, the tax laws give the new owners of the securities a huge break. No matter what the original owner paid for the securities, the people inheriting the securities get to claim the price of those securities on the deceased person’s date of death as the securities’ new tax basis. This is referred to as a stepped-up basis.
For example, if a rich uncle leaves one of y