Compare capital gains tax on gifted assets against inherited step-up basis.
Gifting appreciated assets transfers the original basis, so the recipient inherits the entire unrealised gain. Inheriting instead resets the basis, eliminating tax on appreciation during the owner's lifetime. This is why highly appreciated assets are generally best held until death and cash or low-basis assets gifted instead, where estate tax is not a binding concern.
Step-Up Basis
Gifted assets keep the original basis; inherited assets step up to market value at death
This is a general illustration, not financial, tax or legal advice. Rules, thresholds and rates vary by jurisdiction and change frequently, and individual circumstances materially affect outcomes. Consult a qualified adviser before making any decision based on these figures.
Gifted assets keep the original basis; inherited assets step up to market value at death Gifting appreciated assets transfers the original basis, so the recipient inherits the entire unrealised gain. Inheriting instead resets the basis, eliminating tax on appreciation during the owner's lifetime.
This is why highly appreciated assets are generally best held until death and cash or low-basis assets gifted instead, where estate tax is not a binding concern.
This calculator takes 6 inputs: Original cost basis, Current market value, Capital gains tax rate, Estate tax rate if applicable, Years until sale, Annual appreciation. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.