In most cases, there is no step-up in basis when property is gifted. But there are a few exceptions and those exceptions can be difficult to remember. This flowchart addresses some of the most common issues that arise for an individual trying to understand how their cost basis is impacted as a result of property they received as a gift. Some items to consider are:
Double Basis Rules
Impact if gift tax was paid by the donor
Situations where cost basis carries over
Situations where there is a partial step-up in basis
Situations where no gain or loss is recognized
Updated for 2019