Avoid the “Step-Down in Basis” Pitfall | Krilogy Tax Services
A commonly known provision of the tax code is the step-up in basis rule; many taxpayers encounter this when inheriting appreciated assets. A lesser-known and tricky related provision is the step-down rule, which can be a potential hazard causing losses to remain unrealized. This, in turn, leads to possible tax savings disappearing into thin air. As background, the IRS allows…