Step-Up in Basis

Step-Up in Basis refers to the adjustment of the tax basis of an inherited asset to its fair market value at the time of the decedent's death. This eliminates capital gains taxes on any appreciation that occurred during the decedent's lifetime if the asset is sold immediately after inheritance. For family offices, this is a critical estate planning tool, as it can significantly reduce tax liabilities for heirs and preserve generational wealth. Proper use of the step-up in basis can optimize after-tax returns and enhance the efficiency of wealth transfer strategies, making it a key consideration in managing intergenerational assets.