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||4.02%||4.09%|
|15 yr fixed||3.19%||3.25%|
|30 yr refi||4.04%||4.09%|
|15 yr refi||3.24%||3.25%|
Today's featured rates:
Boom Aerospace has the green to take the first phase of its supersonic airline plans into the blue. More
President Trump says Obamacare is exploding, so it's up to him to make changes to it to keep it afloat for 2018 and beyond. More
In a company-wide email on Friday, Hampton Creek CEO Josh Tetrick wrote that both the SEC and the Department of Justice have closed their inquires into the company's so-called mayo-buyback scheme. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
A PwC report estimates that 38% of U.S. jobs are at a high risk of being replaced by robots and artificial intelligence over the next 15 years. More