Kingsfield · Research · Tax

What is the income tax basis of property a taxpayer acquires from a decedent?

Published 2026-06-23 · U.S. federal law

Section 1014 sets the basis of property acquired from a decedent at its fair market value on the date of the decedent's death, giving heirs a step-up.

The answer

The step-up rule

26 U.S.C. § 1014(a) provides that the basis of property acquired from a decedent is the fair market value of the property at the date of the decedent's death, eliminating pre-death appreciation from the heir's later gain.

What counts as acquired from a decedent

The rule reaches more than probate transfers. Section 1014 applies to property acquired by bequest, devise, or inheritance, and to certain property included in the decedent's gross estate.

The judged input

What the AI drafted

Submitted to the judge

This is an excerpt from a draft client tax opinion letter — the kind of work product a lawyer generates with a legal-AI drafting tool, then has to stand behind. Kingsfield does not write it; it rules on the citations the model put in it. This draft cites two authorities; one of them is wrong.

AI draft excerpt — client tax opinion letter

We advise that the appreciated stock you inherited carries a basis adjusted to its date-of-death value rather than your father's original cost. Under 26 U.S.C. § 1014(a), the basis of property acquired from a decedent is its fair market value at the date of the decedent's death, so the pre-death gain escapes income tax in your hands. This stepped-up basis rule for inherited property is distinct from the carryover-basis rule for gifts, which appears at 26 U.S.C. § 1015.

The judge ruled on every citation as the draft used it — it accepted 26 U.S.C. § 1014(a) and rejected 26 U.S.C. § 1015. Here is why.

The verdict

How Kingsfield ruled

Ruled 2026-06-23

Each citation in the draft above was submitted to the Kingsfield judge and ruled against the primary-law corpus — Accept, Reject, or Inconclusive, per citation. These are live verdicts, not editorial. Each card shows the claim the draft made and the verbatim authority the verdict was rendered against.

Accept26 U.S.C. § 1014(a)

The draft claimed: The basis of property in the hands of a person acquiring it from a decedent is the fair market value of the property at the date of the decedent's death.

“§ 1014(a) Except as otherwise provided in this section, the basis of property in the hands of a person acquiring the property from a decedent or to whom the property passed from a decedent shall, if not sold, exchanged, or otherwise disposed of before the decedent’s death by such person, be—”

Cite found; proposition supported by the cited text.

Reject26 U.S.C. § 1015

The draft claimed: Section 1015 sets the basis of property acquired from a decedent at its fair market value on the date of death.

Cite found, but the cited text does not support the claim. 26 U.S.C. 1015 governs the basis of property acquired by gift, which generally carries over the donor's basis; the fair-market-value basis for property acquired from a decedent is at 26 U.S.C. 1014. Regenerate with the correct authority.

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Kingsfield rules on every citation, quote, and proposition your AI produces, against the primary law we cover. Accept, Reject, or Inconclusive, per citation, with a signed Audit Capsule.

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This page is legal information, not legal advice, and does not create an attorney-client relationship. The draft shown is an illustration of a typical AI answer; verdicts reflect the cited authority in the Kingsfield corpus as of the ruling date shown above.