[WSBARP] Step-Up in Basis Upon Conveyance

[Mark Anderson]

Thank you for the cite and the analysis.
Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Nick Pleasants
Sent: 02/16/2023 1:50 PM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com>
Subject: Re: [WSBARP] Step-Up in Basis Upon Conveyance

Mark,
It's a plain reading of 26 USC § 1014<https://www.law.cornell.edu/uscode/text/26/1014>(b). The basis adjusts to the fair market value if the property is received from a decedent in a way that the statute describes.
As for the examples you posed, I think as a bright line rule, property received before death does not qualify for adjustment to basis, and property received after death can qualify if it meets one of the criteria in the statute. Generally speaking, distributions under a Will, Trust, Transfer on Death Deed, Pay-on-Death, Beneficiary Designation, etc. should all qualify as "inheritance" under 26 USC § 1014(b)(1).
This is not tax advice to you or anyone else.
Best,
Nick
Nicholas Pleasants | Shareholder

[OseranHahnAttyatLaw 8]

11225 SE 6th Street | Suite 100 | Bellevue, WA 98004
Main: (425) 455-3900 | Fax: (425) 455-9201 | E-mail: npleasants at ohswlaw.com<mailto:npleasants at ohswlaw.com>

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From: wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com> <wsbarp-bounces at lists.wsbarppt.com<mailto:wsbarp-bounces at lists.wsbarppt.com>> On Behalf Of Mark Anderson
Sent: Thursday, February 16, 2023 9:28 AM
To: WSBA Real Property Listserv <wsbarp at lists.wsbarppt.com<mailto:wsbarp at lists.wsbarppt.com>>
Subject: [WSBARP] Step-Up in Basis Upon Conveyance

Dear All:
My Clients periodically ask questions about the step-up in basis on prospective transfers of real property.  Normally these involve intra-family transfers (between parents and their children, family trusts, etc.).
For the following scenarios, will the recipient receive a step-up in basis?
Transfer prior to death by gift.  [My understanding is that there is no step up in basis.]
Transfer prior to death as a distribution under the terms of a trust agreement.
Transfer prior to death as an advance on inheritance (either by existing will or anticipated intestate succession).
Transfer at time of death pursuant to the terms of a will.  [My understanding is that the recipient receives a step-up in basis.]
Transfer at time of death pursuant to the terms of a trust agreement.
Transfer at time of death pursuant to a transfer on death deed.
In advance, thanks for your help here.
Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
CONFIDENTIALITY NOTICE
This transmission is confidential and is intended solely for the use of the individual named recipient. It may be protected by the attorney-client privilege, work product doctrine, or other confidentiality protection. If you are not the intended recipient, or the person responsible to deliver it to the intended recipient, be advised that any dissemination, distribution, or copying of this communication is prohibited. If you have received this transmission in error, please immediately notify the sender via e-mail or by telephone at (253) 327-1750 that you have received the message in error, and then delete it. Thank you.

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