You seem to be mixing different things. A step-up in basis occurs when the owner dies and the heirs get the value at the date of death, whether the asset goes to them individually or into a trust. There is no step-up in basis if the living owner transfers the assets into a trust. Rather the trust has the owner’s basis. Any use of AI for research is only a starting point on legal and tax matters. AI is notorious for providing many limited or erroneous answers. You need to go to the source, such as the state statute or case law, or for step-up in basis to the Internal Revenue Code to determine the how and under what circumstances the basis is changed.
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