Question: I'm 94 years of age and own a home in Massachusetts. When I pass, will my heirs be able to take the $250,000 federal capital gains deduction that I would have been entitled to if I sold the house? Does this differ from state to state?

Response: No, you cannot pass on your $250,000 capital gains exclusion to your heirs, but they won't need it because they get something better – a step-up in basis.