Inheritance of Securities

What this video covers

• How the stepped-up basis resets inherited securities to fair market value (FMV) at death, and why the decedent's original purchase price is never the beneficiary's basis
• The stepped-down basis scenario, when FMV at death is lower than the decedent's original cost, and how that similarly resets to market value
• Why inherited securities are always treated as long-term capital assets, with no minimum holding period required for the beneficiary
• When an executor may elect the alternate valuation date (six months after death), and why it must reduce both gross estate value and estate tax liability
• The all-or-nothing nature of the alternate valuation election, and what happens to assets sold or distributed before the six-month mark
• How community property states give both halves of jointly held property a step-up, while common law states step up only the decedent's share
• The side-by-side contrast between gifted securities (carryover basis, tacked holding period) and inherited securities (stepped-up basis, always long-term)