Primary Author: Scott Beane, CPA
Is it true that if I gift low basis assets, like stock I bought in 1960,
to a terminally ill person and he or she then
Wills the items back
to me, that such inherited property that I receive will be granted a tax
cost basis equal to the fair market value on the date of death and that
upon sale of that property at that price I will not have any capital gain
taxes to pay?
In general, you are correct. However, Section 1014, relating to basis step-up,
may not apply to those assets if, within one year of death, such appreciated
assets revert back to you. Also keep in mind that the gift, if greater
than $10,000 will require a gift tax return.
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