"Death Taxes" generally refer to estate taxes. Estate taxes are any taxes applied to the transfer of a person’s assets at death. Taxable assets include personal property such as a house, cars, furniture or musical instruments, business assets like land, equipment and inventory, and investments like stocks, bonds and real estate.
President Obama proposed a change to estate tax policy in his January State of the Union address that was aimed at removing the step up basis at death provision. The proposed change would affect a lot of families and family-owned businesses, including many in Santa Barbara, Ventura and San Luis Obispo counties.
So what is the step up basis and what is its purpose? The step up at death basis works like this: