[freddie_mercury]

Nah, the original inspiration wasn't about family homes. It was introduced in 1921, 5 years after income taxes became a thing, and was an attempt by Congress to remove a kind of double taxation that could (at that time) happen with estate taxes.

You would pay an estate tax (on the total value of something, regardless of its cost). And then you'd still (when you eventually sold it) owe capital gains tax.

Regardless of whether you think that particular reasoning makes sense, it definitely doesn't make sense if there's no estate tax (which there effectively isn't for most due to the multi-million dollar exclusion) since there's no risk of double taxation.

Step up basis was actually repealed in 1976. But there was immense pushback at the time around record keeping and Congress eventually agreed and retroactively cancelled the new law.

Whether the answer would be different today in this age of computerised record keeping .... ?