Property held until death ordinarily is entitled to a new income tax basis, determined as of the date of death of the owner.1 However, property defined as “income-in-respect-of-decedent” at the death of the property owner is not eligible to receive a new income tax basis as of the death of the owner of the property.2 With the run-up in property values in recent years, the result can be a sharp difference in future income tax liability, depending upon the classification of the property at death. Without much doubt, the federal income tax provisions (as well as state income tax rules in most states), in short, strongly encourage retention of highly appreciated property until death. Likewise, the rules separating income-in-respect-of-decedent property from other assets have great significance in planning for the disposition of assets at death.