Here on December 29, it happens every year. We get blitzed with year-end gifting decisions. Yesterday, a gentleman walked into my office wanting to speak with me about whether his parents should engage in year-end gifting. HIs parents have a large estate but the son said the CPA told them not to give because they would lose the step-up in basis.
I asked the son what the parents were intending to gift. He said, "Cash - my parents are going to do a transfer out of their savings account." I then asked if the parents "wanted" to gift. He said the parents were ready and willing to do it - it sounded like the parents were getting some personal satisfaction out of making the gifts.
They decided to gift. Generally, a gift of cash is better than a gift of an appreciated assets (like appreciated stock or real estate). The apppreciated assets that remain in the parents' estate will get a step-up in basis at death. But there is no loss in step up when the gift is cash.