Congress will again feel pressure to undo the one-year requirement and let affected returns choose stepped-up basis.

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Finally, when he dies, his heirs will enjoy a stepped-up basis and the government will never collect any revenue from all those unrealized capital gains.

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By contrast, if you leave the same stock to the same person in your will, the recipient gets a stepped-up basis to the value as of your date of death, saving capital gains tax.

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First they felt lucky there was no federal estate tax in 2010, but then they realized they had to deal with income taxes on estate asset appreciation, whereas that was not a concern with stepped-up basis with the estate tax regime.

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Using tax loss harvesting to defer capital gains taxes is like receiving an interest-free loan from the IRS. Also, if you (and your spouse) are still holding the shares when you die, your heirs will receive a stepped-up basis, and you will have gotten the up-front benefit from tax loss harvesting while avoiding the taxes on the back end entirely.

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The wiki goes on to show examples of how it works when you invest a single sum, covers topics such as using a loss from one tax lot to offset the capital gains from another, donating low basis shares to a charity, and how the stepped-up cost basis works at death.

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By buying the assets, Gray was able to get a stepped-up tax basis, so it could depreciate the licenses and other assets.

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If, however, you live in a community property state and hold property jointly, at the death of the first spouse the entire property is stepped up in basis--meaning it can be sold immediately without gains tax.

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