[bradleyjg]

Right. I don't see why we need a step up basis at death. If you want to put it at $10,000 or something just to avoid a lot of paperwork for a de minimis tax loss, that'd be fine. But otherwise the tax basis of an asset should be whatever it was bought for, by whoever bought it.

[jws]

The problem here is that the buyer is dead and knowledge of the basis may be lost. It could be written down in a safe place, but not known to estate's executor.

[secabeen]

That was the historic reason, and it certainly had value. In the information age, I think we could consider requiring the recording of cost basic for assets purchased after some date. (The SEC started requiring brokerage firms to record cost basis a few years back, so we're on the way)