Definitions for "Step-Up In Basis"
Keywords:  decedent, oth, bona, fide, basis
An increase in the taxpayer's basis (a figure representing the taxpayer's cost of acquiring an asset) that occurs after a specific triggering event. Typically, a step-up in basis applies if an asset was inherited from a deceased's estate; the basis in the inherited asset is its current market value. A step-up in basis may also apply in the case of a bona fide sale.
A decedent's capital gains property that passes to oth­ers and escapes the capital gains tax when sold by the person who inherits the property. Persons inheriting capital gains property receive the property at date-of-death fair market value. In effect the basis in this property is deemed to be "stepped up" and does not reflect the decedent's original cost basis for determining applicable capital gains tax on the sale of the property.
An increase in the tax basis of property to the value claimed in the taxable estate of a decedent.