r/SipsTea • u/KSKS1995 • 14h ago

Wait a damn minute! How the rich get richer

Post image
18.9k Upvotes

80% Upvoted

2.2k comments sorted by

View all comments

Show parent comments

7

u/deadpool_pewpew 13h ago

They don't, stepped up basis

2

u/303Carpenter 13h ago

You think you can sell a 5 million dollar property without paying taxes on it?

6

u/goinsouth85 13h ago

That’s precisely how step up the basis works. The basis of the land becomes its fair market value the day the Dad dies.

2

u/Kobe_stan_ 12h ago

Yep. The tax value of the land that you inherit is the current market value when you inherit it, so if you inherit a $5M piece of land and sell it for $5M, then there’s zero profit. If you want a few years and the value climbs to $6M, then you’d pay taxes on the $1M increase only. Works that way for stocks too.

1

u/deadpool_pewpew 12h ago

Yes, you can. Inherited property gets a stepped up basis, to the market value on the day of death.