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Will I Receive A Step-Up In Basis For This Gifted Property?

FLOWCHART

In most cases, there is no step-up in basis when property is gifted. But there are a few exceptions to the general rule, which can be difficult to remember.

To help make this analysis easier, we have created the “Will I Receive A Step-Up In Basis For This Gifted Property?” flowchart. It addresses some of the most common issues that arise for a client trying to understand their cost basis in property they received as a gift. This flowchart considers:

  • Double basis rule

  • Impact if gift tax was paid by the donor

  • Situations where cost basis carries over

  • Situations where there is a partial step-up in basis

  • Situations where no gain or loss is recognized

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