You may have heard the term “Stepped-Up Basis”, that many believe is a tax provision that allows beneficiaries of an inheritance to reduce or even avoid taxes when and if they sell inherited property.
If an individual sells property, any gain from the sale of that property is taxable. The tax term “basis” is the value from which any taxable gain is measured. In regard to personal use or investment property, the basis is generally the cost of the property. For business property the term basis is replaced with adjusted basis, which usually means the cost of the property reduced by business deductions attributable to the property.