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||4.08%||4.24%|
|15 yr fixed||3.19%||3.23%|
|30 yr refi||4.06%||4.15%|
|15 yr refi||3.17%||3.17%|
Today's featured rates:
Nike flexes its huge dollar advantage by signing Durant to a $300 million endorsement deal that trumps $285 million offer from Under Armour More
If approved by Los Angeles city council, the plan could raise wages for 567,000 workers by 2017. More
A scam where fraudsters impersonate IRS agents has now stolen $5 million from taxpayers, and this woman - who lost her entire life savings -- is just one of its victims. More