Stepped-Up Basis

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August 25, 2024 3 min read Definitions

Historical Cost: Accounting Principle and Application

Accounting Finance Historical Cost Accounting Principle Tax Basis Stepped-Up Basis Market Value

The historical cost principle is a foundational accounting concept requiring assets to be recorded based on their original cost. This entry explores its application, implications, and related concepts such as stepped-up basis and market value.

August 25, 2024 4 min read Definitions

Stepped-Up Basis: Tax Adjustment for Inherited Property

Taxes Finance Inheritance Stepped-Up Basis Fair Market Value Tax Basis Inheritance Tax Decedent

The process by which a property’s tax basis is reset to its fair market value at the date of the owner's death, commonly applied to inherited assets.