Case study #001
The $20K+ Step-Up Basis Save (1970 Chevrolet Collectible)
Service: Tax Planning & Strategy · Client: Doctor's mother, New Jersey
Before
~$27K tax
on $95K reported gain
After
~$3.5K tax
on $12K real gain
Saved
~$23K
in capital gains tax
The problem
A doctor in New Jersey contacted us about his elderly mother. She was planning to sell a 1970 Chevrolet collectible car for $100,000. The original purchase basis was $5,000 (her late husband had bought it decades ago). Her previous accountant had told her to expect tax on the full $95,000 capital gain — roughly $27,000 between federal long-term capital gains rates and NJ state tax.
What we asked
The key question her previous CPA never asked: "When did your husband pass, and was the car appraised at that time?" The husband had died in 2005. Estate records showed the car was valued at $150,000 at his date of death.
The planning move
New Jersey is a non-community-property state, so the half of the car owned by the husband stepped up to fair-market value at his death. The mother's new tax basis became $2,500 (her original half) + $75,000 (the stepped-up half from her husband) = $77,500. We documented the historical appraisal, pulled the estate records to support it, and structured the sale on her 2026 return correctly.
The outcome
Taxable gain dropped from $95,000 to $22,500 — and after applying a small capital loss carryforward from another investment, the realized gain was only $12,000. Total tax dropped from roughly $27,000 to approximately $3,500. Family savings: roughly $23,000-$25,000 depending on her exact bracket the year of sale.
Time invested
One phone call + one follow-up
ROI on consultation
~50× the consultation fee