When we think of income taxes, we think of how much we earn. But, another aspect of income tax is the gain or loss on assets. Income tax basis is central to how assets are taxed in the United States. This is the first of a series on income tax basis. This blog will examine income tax basis, how you get it, and how it gets adjusted. The next article will look at how income tax basis is important in estate planning. Let’s look at the life of an asset and its income tax basis during that life. … [Read more...] about Income Tax Basis
Depreciation
Income Tax Basis in Estate Planning – Part 2
When considering different estate planning strategies and which direction to take, it’s important to consider the impact on basis. “Basis” is the benchmark used for income taxation. What does income tax basis have to do with estate planning? Property included in your taxable estate at your death gets a “step-up” in basis to its value at your death. (Certain property like IRAs don’t get this step-up.) However, when you gift an asset, the basis generally goes with the asset. Let’s say you … [Read more...] about Income Tax Basis in Estate Planning – Part 2
Basis is Important in Estate Planning
When considering different estate planning strategies and which direction to take, it’s important to consider the impact on basis. “Basis” is the benchmark used for income taxation. What does income tax basis have to do with estate planning? Lots! Property included in your taxable estate at your death gets a “step-up” in basis to its value at your death. (Certain property like IRAs don’t get this step-up.) This article will lay the groundwork on basis. What is it? When is it adjusted? … [Read more...] about Basis is Important in Estate Planning
