What is the difference between transferred (or substituted or carry-over) basis and a step-up (or step-down) basis? Question 2Answer Transferred basis occurs when property is inherited and a step-up in basis can occur when property is gifted A step-up in basis can occur when property is inherited and transferred basis occurs when property is gifted Transferred basis applies to real property and a step-up in basis applies to personal property Transferred basis and a step-up in basis mean essentially the same thing None of the above