There is a misconception that there is always a step up in basis, but it works both ways.
For example, if the decedent paid $300,000 for a house and died owning that house at a time when it had declined in value to $275,000 on the date of death, then the basis (as acquired from a decedent) is $275,000.
Another example that is relevant here is this: If the decedent had a $50,000 capital loss carryover from 2019 to 2020 and had $30,000 in capital gains prior to passing in 2020, then of the $20,000 net capital loss, $3,000 could be used to offset other income; the remaining $17,000 is lost.
