What is the step-up in basis?

The step-up in basis is a valuable tax rule that resets the value of inherited assets to their worth on the date of death. So if your parent bought stock for 10,000 dollars and it was worth 100,000 when they died, your basis becomes 100,000. If you sell it right away, you owe little or no capital gains tax on that growth. This rule can save heirs a substantial amount, especially on long-held property or investments.