What basis adjustment occurs for inherited JTWROS property at the date of death?

Inheriting property that is held in Joint Tenancy with Right of Survivorship (JTWROS) leads to a significant basis adjustment. When one co-owner of a JTWROS account passes away, the surviving owner typically receives a step-up in basis for the portion of the property they inherit. This means that the basis of the inherited property is adjusted to its fair market value on the date of the deceased owner's death.

This step-up in basis is crucial for tax purposes, as it potentially reduces the capital gains tax liability when the surviving owner eventually sells the property. By having the basis reflect the current market value rather than the original purchase price, it can significantly lower the taxable gain, as the gain will only be calculated on the appreciation that occurs after the date of death.

This tax benefit underscores why the answer refers to a complete step-up in value at the time of the death, rather than retaining the original basis or calculating it based on contributions or allowing for an optional basis. Such adjustments provide important financial relief for heirs.