What is involved in a step-up in basis?
Step-up in basis is a concept related to inheritance law in Alaska. It is a tax term that refers to the process of increasing the value of an asset for tax-related purposes. This principle is related to an individual’s estate plans. It is often the case that when an asset is inherited, its value can reset automatically to the current market value. This new value is sometimes referred to as the “stepped-up basis” of the asset. To understand further, let’s look at an example. Suppose an individual owns an asset that has a value of $100,000 and plans to leave this asset to their child. When the child inherits the asset, the stepped-up basis would be the current market appraisal value, which may end up being more (or less) than the $100,000 original value. In the event of a step-up in basis, the child would own the asset at the current appraisal value – not the original value. Step-up in basis can be very beneficial in terms of estate planning. It allows the inheritor to avoid capital gains taxes on the difference between the original value of the asset and its new, stepped-up basis. This can help to minimize the amount of taxes owed to the state when assets are transferred between generations. In conclusion, step-up in basis is a term related to inheritance law in Alaska. When an asset is inherited, the original value of the asset may be increased to the current market value. This new value is referred to as the stepped-up basis of the asset and it can help to avoid capital gains taxes.
Related FAQs
What is the meaning of an executor?What is inheritance law?
How can a trust be terminated?
What are the possible consequences of a breach of fiduciary duty?
What is an upgrade/downgrade provision?
What is the Uniform Probate Code?
What is a no-contest clause in a will?
What is an inter vivos trust?
What is a private annuity trust?
What is a codicil?
Related Blog Posts
Understanding the Basics of Inheritance Laws: A Guide to Successfully Navigating State and Federal Statutes - July 31, 2023How to Ensure Your Estate Plan Reflects Your Wishes Through Inheritance Laws - August 7, 2023
Protect Your Rights as a Beneficiary: Understanding Your Legal Rights After Beneficiary Inheritance - August 14, 2023
Comprehending the Duties and Responsibilities of Executors of Estates: How to Properly Administer an Estate and Fulfill Inheritance Law Requirements - August 21, 2023
Maximizing the Benefits of Inheritance Law for Family Heirs of Estates - August 28, 2023