Basis Planning and the Step-Up at Death

What this guide covers

• For estates below the $15,000,000 exclusion, basis step-up under IRC 1014 usually outweighs any transfer-tax motive for lifetime gifting.
• Income in respect of a decedent under IRC 691, including traditional retirement accounts, never receives a basis adjustment.
• Use a grantor trust substitution power under IRC 675(4)(C) to swap high-basis assets into the trust and low-basis assets back into the estate.
• IRC 1014(e) denies a step-up where appreciated property gifted within one year of death returns to the donor or the donor's spouse.
• Community property receives a full adjustment on both halves at the first death under IRC 1014(b)(6); plan titling accordingly.
• A partnership needs a valid IRC 754 election for the inside basis adjustment under IRC 743(b); an S corporation has no equivalent.

The full guide includes the detailed analysis, worked examples, statutory citations, and related resources below.