Stepped-up basis at death lets heirs sell inherited property free of capital gains tax

Evidence

The Brewsters, you’ll recall, were among the wealthiest families of their era—part of the reason Frederick Brewster wanted his mansion razed was that the upkeep alone was 100,000 per year—but to keep it simple let's say that Frederick purchased his property for 20,000, and it had grown in value to 100,000 at the time of his death. If that happened, his children would inherit 100,000 of property tax-free—and could sell it for full value, the very next day, without paying any federal income taxes. Why? Because for inherited property, the basis rule is fair market value at death. If they sell for exactly the fair market value (what a typical buyer is willing to pay), the entire amount is not considered a taxable gain—and they keep all of that wealth. — Dorothy A. Brown, The Whiteness of Wealth, 474

Categorization

• XREF: This is a named tax-code provision (stepped-up basis) with its exact mechanism — core to the reader’s need for four specific provisions; connects to broader theme of tax privilege flowing to wealthy families like the Brewsters.