The adjust to the value of property at a person's death for tax
purposes. The value of the asset is determined by the market value of the asset at the time of death and not the amount the testator paid to purchase the asset.
For example, if a person bought a
home in 1980 for $50,000 that was worth $200,000 at death, the person's heirs would have a tax basis of $200,000, for that property. No
income or capital gains tax is paid on the $150,000 increase in value, should
the heirs sell the home for $200,000.