Week 43 Day 4: The Step-Up in Basis at Death: The Ultimate Tax Strategy

When you die, your heirs receive your investments at their current market value, not at your original cost. All unrealized capital gains are permanently erased. If you bought VTI at $100,000 and it is worth $500,000 at your death, your heirs' cost basis is $500,000. The $400,000 gain is never taxed by anyone, ever.