<html><head><meta http-equiv="content-type" content="text/html; charset=utf-8"></head><body dir="auto">Mark:<div><br></div><div>Whether the asset receives a basis adjustment (up or down) or not is a question of federal tax law. The determinative factor is whether it is included in the gross estate of a decedent. If there has been an inter-Vito’s transfer by gift or otherwise that removes the asset from the estate and no Code provision claws it back, there is no basis adjustment. </div><div><br></div><div>An advance is still an interviews transfer. Transfer from a trust depends. If an RLT, yes, an irrevocable credit shelter trust that is not QTIP’d, no. </div><div><br></div><div>John J. Sullivan</div><div><br><div dir="ltr">Sent from my iPad</div><div dir="ltr"><br><blockquote type="cite">On Feb 16, 2023, at 1:50 PM, Nick Pleasants <npleasants@ohswlaw.com> wrote:<br><br></blockquote></div><blockquote type="cite"><div dir="ltr">
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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">Mark,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">It’s a plain reading of
<a href="https://www.law.cornell.edu/uscode/text/26/1014">26 USC § 1014</a>(b). The basis adjusts to the fair market value if the property is received from a decedent in a way that the statute describes.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">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).<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">This is not tax advice to you or anyone else.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">Best,
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">Nick<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><b><span style="font-size:12.0pt;font-family:"Calibri",sans-serif;color:black">Nicholas Pleasants | Shareholder
<o:p></o:p></span></b></p>
<p class="MsoNormal" style="margin-bottom:0in"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:black"><o:p> </o:p></span></b></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#70AD47"><div><image001.jpg></div><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:#70AD47"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:black">11225 SE 6<sup>th</sup> Street | Suite 100 | Bellevue, WA 98004<br>
Main: (425) 455-3900 | Fax: (425) 455-9201 | E-mail: <a href="mailto:npleasants@ohswlaw.com">
npleasants@ohswlaw.com</a> <o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in"><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:black"><o:p> </o:p></span></p>
<p class="MsoNormal" style="margin-bottom:0in;text-autospace:none"><span style="font-family:"Times New Roman",serif;color:#1F497D">CONFIDENTIALITY NOTE: This e-mail message contains information belonging to the law firm of Oseran Hahn, P.S., which may be privileged,
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<p class="MsoNormal" style="margin-bottom:0in"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif;color:windowtext"> wsbarp-bounces@lists.wsbarppt.com
<wsbarp-bounces@lists.wsbarppt.com> <b>On Behalf Of </b>Mark Anderson<br>
<b>Sent:</b> Thursday, February 16, 2023 9:28 AM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> [WSBARP] Step-Up in Basis Upon Conveyance<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="color:#002060">Dear All:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#002060">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.).
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#002060">For the following scenarios, will the recipient receive a step-up in basis?<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><a name="_GoBack"></a><span style="color:#002060">Transfer prior to death by gift. [My understanding is that there is no step up in basis.]</span><span style="font-family:"Times New Roman",serif;color:#002060"><o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#002060">Transfer prior to death as a distribution under the terms of a trust agreement.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#002060">Transfer prior to death as an advance on inheritance (either by existing will or anticipated intestate succession).<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#002060">Transfer at time of death pursuant to the terms of a will. [My understanding is that the recipient receives a step-up in basis.]<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#002060">Transfer at time of death pursuant to the terms of a trust agreement.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-left:.5in"><span style="color:#002060">Transfer at time of death pursuant to a transfer on death deed.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="color:#002060">In advance, thanks for your help here.<o:p></o:p></span></p>
<p class="MsoNormal" style="margin-bottom:12.0pt"><b>Mark B. Anderson<br>
</b>ANDERSON LAW FIRM PLLC<br>
821 Dock St Ste 209 PMB 4-12<br>
Tacoma, Washington 98402<br>
+1 253-327-1750<br>
+1 253-327-1751 (fax)<br>
<a href="mailto:marka@mbaesq.com"><span style="color:blue">marka@mbaesq.com</span></a><br>
<a href="http://www.mbaesq.com/"><span style="color:blue">www.mbaesq.com</span></a><b><o:p></o:p></b></p>
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