Alex, a resident of the United States, has accrued capital gains and she dies prior to the realization of her gains. Which of the following is true of Alex's capital gains?

Question

Quizplus · Accepted Answer

Upon Alex's death, the capital gains on her assets become tax-free due to the step-up in basis rule. This means her heirs inherit the assets at their current market value, not the value at which Alex acquired them, potentially eliminating capital gains tax.

Alex, a Resident of the United States, Has Accrued Capital