Stepped up Value

[Blue Collar Guy]

So, I know the situation for tax deferred holdings might be different, but for my regular investments. If I die and I leave it all to my wife, will she get the date of death base value?

Im positive Im going first. If we put all the assets into my name and she is the beneficiary, when I die ,will all the capital gains that I haven't paid for yet get wiped away?

If the assest stay joint, when I die she gets the stepped up value for only half of the assets. Yes?

 

[wolf]

So, I know the situation for tax deferred holdings might be different, but for my regular investments. If I die and I leave it all to my wife, will she get the date of death base value?

Im positive Im going first. If we put all the assets into my name and she is the beneficiary, when I die ,will all the capital gains that I haven't paid for yet get wiped away?

If the assest stay joint, when I die she gets the stepped up value for only half of the assets. Yes?

My understanding:

1. Capital gains not wiped away. Assets receive a step up in basis. No tax on
the gain.

2. If in joint. 100% of assets get step up in basis. Your half included.

3. If a A/B trust involved, results may be different.

 

[GrayHare]

Note that step up is the current law, but you should not rely 100% on it because the step up might go away if the estate "death" tax is eliminated.

 

[kaneohe]

................................
Im positive Im going first. If we put all the assets into my name and she is the beneficiary, when I die ,will all the capital gains that I haven't paid for yet get wiped away?

If the assest stay joint, when I die she gets the stepped up value for only half of the assets. Yes?

yes, basis stepped-up so unrealized CG =0 (if in your name only)

yes,generally only 50% step up if help JTWROS. However if you live in community property state and have a community property agreement that attests that assets are community property, then you can get 100% step up.

Risk , if you are wrong about going first, then no step up for you if in your name.

 

[Blue Collar Guy]

I believe I got my answer, Thank you to the above posters for their help.

 

[pb4uski]

This thread poses an interesting question though... if one gets will and is terminal, can you transfer taxable assets to the name of the terminal spouse and optimize the step up in basis rules? Or move to a state where community property rules result in a 100% step up vs states where it is only 50%?

IOW, is there a way to legally take advantage of the rules?

 

[pb4uski]

Seems that there is: http://www.cpajournal.com/2017/08/18/greatest-hits-community-property-step-basis/

 

[Sunset]

I believe I got my answer, Thank you to the above posters for their help.

Nothing like cutting the thread short.

 

[Blue Collar Guy]

Nothing like cutting the thread short.

This idea is definitely a keeper. I wrote this down to talk over with some people. Its on my very very short honey do list.