Do Assets in a Living Trust Get a Step-Up in Basis?

To understand what a step-up in basis is all about, you have to have some background information about the capital gains tax. Assets that appreciate are subject to this tax when a gain is realized. You would realize a gain when you sell the asset in question. There are long-term capital gains, and short-term capital gains, and they are taxed at different rates, because the government would like to encourage long-term investing. Short-term gains, which are gains that are realized less than a year after the original acquisition, are taxed at your regular income tax rate. As you might imagine given the definition of short-term gains, long-term capital gains are gains that are realized more than a year after you originally purchased the assets. These gains are taxed at a lower rate. The exact rate is based on your taxable income. The highest income earners pay a 20 percent rate, but most people pay 15 percent. Step-Up in Basis When you absorb all the information above, a logical question
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