What type of property should be transferred to heirs at a decedent's death and why? Should estate planning also mean that some property is transferred prior to death? Why?
What will be an ideal response?
Property transferred at decedent's death should be highly appreciated property since this property will receive a step-up in basis.
Property that has declined in value (i.e., FMV is less than basis) should be sold prior to death to obtain a deduction for the loss. If this property is transferred at decedent's death, its basis is reduced to its FMV.
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