Heir will get `stepped-up basis'

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Heir will get `stepped-up basis'
2006-10-09
Q: You recently answered a question about passing a property title to an heir by a revocable living trust. Does the living-trust heir receive the house at the decedent's presumably low cost basis, thereby incurring a larger gain on sale than if title simply passed by probate to the heir by a will? A: The same ''stepped-up basis'' rule applies to the heir, whether title to the inherited property passes by probate of a will or without probate court costs and delays via the deceased's revocable living trust. There are two primary living-trust advantages over a will. One is the avoidance of probate court costs and delays. Also, if the property owner becomes disabled, perhaps with Alzheimer's disease or a severe stroke, then the successor trustee takes over management of the living trust assets without the need for a court-appointed conservator....
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