Older generation keeping properties they really don’t want in order to get capital gains step up in basis for heirs?
I’m just wondering if this is a wide-spread issue in other families? Are there many older people who struggle to maintain highly-appreciated, older, too-large homes or have even moved into assisted living, yet don’t want to sell until they pass due the loss of step up in basis for their heirs?
I realize that there is a $250k/single, $500k exemption for primary residences but in expensive areas where people bought for peanuts 50 years ago, it can be an issue. Also second homes and rentals don’t get the exemption.
I get that it’s a privileged problem to have, but it does make things difficult because then the heirs have to agree over purchase price, etc., after death and of course deal with maintenance issues. And the funds are tied up and not available for care in assisted living/memory care while the person is alive.
Also it would help younger people buy homes if these homes were available on the market.