Stepped-Up Basis Calculator
When property passes at death, federal law resets its cost basis to fair market value as of the date of death. Enter three numbers to see what that reset is worth when the property sells.
What the step-up is
When you inherit property, federal tax law generally resets its cost basis. Under Section 1014 of the Internal Revenue Code, the basis of inherited property becomes its fair market value on the decedent's date of death, rather than what the decedent originally paid. In plain terms, decades of appreciation that would have been taxable gain if the owner had sold during life are not taxed when the property instead passes at death.
The effect shows up when the heirs sell. Without the step-up, the taxable gain would be the sale price minus the original purchase price. With it, the gain is the sale price minus the date of death value, which for a property sold soon after death is often close to zero. Enter the three numbers below to see both versions side by side.
Compare the two outcomes
What the decedent paid for the property. Capital improvements over the years would raise this figure; a CPA can compute the exact adjusted basis.
The value a date of death appraisal establishes.
Why the appraisal is what establishes the basis
The stepped-up basis is only as strong as the number behind it. The IRS does not take an heir's word for what a property was worth on the date of death; it expects a documented, defensible fair market value as of that specific date, even when the sale happens months or years later. A retrospective appraisal with a date of death effective date, supported by comparable sales from that period, is the standard way to establish it.
That document earns its fee at tax time. If the basis is ever questioned, the difference between a supported value and a guess can be the difference between owing nothing and owing tax on years of appreciation, plus the cost of reconstructing a past market long after the sales data has gone stale. An appraisal ordered near the date of death, while the evidence is fresh, is cheaper and stronger than one assembled under examination pressure.
The calculator applies a flat 15 percent federal capital gains rate because that is the rate many taxpayers pay, but it is illustrative only. Your rate depends on your income and holding period, and state tax is not included. This page is educational, not tax advice. Confirm the numbers with a CPA or an estate attorney before acting on them.
Read the estate and date of death appraisal assignment for what the report covers, or start the conversation directly.
Assumptions and sources
The step-up in basis follows Section 1014 of the Internal Revenue Code: property acquired from a decedent generally takes a basis equal to its fair market value at the date of death. The calculator compares taxable gain with and without that adjustment and applies an illustrative flat 15 percent federal capital gains rate; your actual rate depends on income and holding period, and state tax is not included. Alternate valuation under IRC Section 2032 and community property rules are not modeled.
Rules reviewed and calculator last checked: August 29, 2026. Maintained by Scott D.W. Wiley, Georgia Certified Residential Real Property Appraiser, CR432840. The credential is verifiable through the Georgia Real Estate Commission and Appraisers Board at grec.state.ga.us.