stepped-up basis
An increased basis (value that is used to determine taxable profit or loss when property is sold) given to inherited property that went up in value after the deceased person acquired it but before the new owner inherited it. The basis of the new owner is "stepped up" to the market value of the property at the time of death. The stepped-up basis means that when the property is eventually sold, there will be less taxable capital gain.
Category: Real Estate & Rental Property → Selling a House

Nolo’s Plain-English Law Dictionary. . 2009.

stepped-up basis
USA
stepped-up basis, Also known as step-up in basis.
basis that is higher than the transferor's basis. For example, a buyer often receives a stepped-up basis in assets acquired in a transaction structured as an asset acquisition and a transferee often receives a stepped-up basis in property received from a decedent under the IRC § 1014(a).
However, if the transferor's or decedent's basis in the property exceeds the fair market value of the property, there will be a "step-down" in basis.
See also

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

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