NEW YORK (Money magazine) -- Question: Since Congress hasn't yet reinstated the estate tax, what are the tax rules for valuing assets that you inherit in 2010? -- Jack Pickering, La Habra, Calif.
Answer: The absence of the estate tax doesn't mean you won't have to pay taxes on an asset you inherit this year, says Mark Luscombe, principal tax analyst at CCH.
Historically, when you inherited assets like stocks or a home, your tax basis was the fair market value at the time of death (what's known as a stepped-up basis).
So if you sold a stock your grandmother left you, you'd pay capital gains taxes only on any price appreciation since her death.
That's still true for estates below $1.3 million. But under current law, if you are handed down some serious money -- say, a small business your dad started decades ago -- the decedent's original tax basis also carries over.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||4.06%||4.04%|
|15 yr fixed||3.20%||3.19%|
|30 yr refi||4.09%||4.08%|
|15 yr refi||3.25%||3.21%|
Today's featured rates:
Malaysian budget carrier AirAsia says it's gotten the all clear from U.S. authorities to fly its passenger jets to American airports. More
Canada's ambassador to the United States signaled that Canada would consider a trade deal that would exclude Mexico. More
Entrepreneur Cindy Gallop, the founder of Make Love Not Porn, wants to combat the fact that sex is still considered taboo. The world needs sex tech now more than ever, she argues. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More