Finance category
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Cost Basis Step-Up Calculator
Stepped-up basis at death is one of the most powerful estate-planning provisions in US tax law: cost basis resets to fair market value at date of death, wiping out years of pre-death capital gain and depreciation recapture. This calculator computes the new basis under different ownership structures (community property, joint tenancy).
Stepped-up basis
$650,000
Step-up amount
$532,000
Pre-step-up adjusted basis
$118,000
Approx tax savings (20%)
$106,400
If property sold immediately
How the math works
Stepped-up basis at death resets cost basis to fair market value as of date of death — wiping out years of pre-death capital gain. Inherited property sold immediately at FMV results in zero capital gain. Community property states grant full step-up on entire property value at first spouse's death; non-CP joint tenancy = half step-up.
Depreciation recapture also wipes — full reset of basis effectively forgives all accumulated rental depreciation. Powerful estate planning consideration.
EveryCalc calculators are designed for fast, practical estimates with transparent inputs and no required account. We use plain formulas, visible assumptions, and related tools so visitors can check the result from more than one angle.
Results are informational only. For financial, tax, legal, medical, construction, or other high-impact decisions, verify the output against primary sources or a qualified professional.
Learn more about our review process on the EveryCalc methodology page.
How this calculator works
What this page estimates
This Cost Basis Step-Up Calculator is built to give a quick, browser-based estimate for cost basis step-up. Stepped-up basis at death is one of the most powerful estate-planning provisions in US tax law: cost basis resets to fair market value at date of death, wiping out years of pre-death capital gain and depreciation recapture. This calculator computes the new basis under different ownership structures (community property, joint tenancy). The inputs stay on the page during normal use, and the result should be treated as an estimate for planning, comparison, or education rather than professional advice.
Calculation approach
The calculator applies the standard relationship implied by the inputs, then formats the answer so it can be checked and reused. For finance tools, the most important step is using consistent units, rates, time periods, and assumptions before comparing the result with another calculator or outside quote.
Example workflow
For example, start with a realistic value you already know, change one input at a time, and watch how the answer moves. That makes it easier to tell whether the result is being driven by the main amount, the rate, the time period, or a unit conversion.
Practical checks
- Use current, real-world numbers when the result affects money, health, tax, or legal decisions.
- Run a low, base, and high case when the inputs are estimates.
- Check the related calculators below when the next decision depends on a different assumption.
How to interpret the cost basis step-up result
Best use
Use the result as a planning number for comparing payments, rates, returns, tax reserves, or cash-flow choices before you request a quote or make a commitment.
Cross-check
Compare the answer with the contract, lender estimate, tax form, brokerage statement, payroll record, or invoice that will control the real-world outcome.
Watch for
Do not rely on a single optimistic rate, return, or fee assumption. Money pages work best when you run low, base, and high cases and keep professional advice separate from the estimate.
This page belongs to the Finance calculator library, so the answer should be read in the context of the decision you are modeling rather than as a universal rule.
Before relying on this cost basis step-up estimate
Most calculator mistakes come from the inputs, not the arithmetic. Use this short audit before you reuse the answer in a spreadsheet, quote, application, or important conversation.
Confirm source numbers
Match balances, rates, fees, taxes, income, and payment dates against the lender quote, payroll record, tax form, statement, invoice, or contract.
Separate cash flow from total cost
A lower monthly payment can still cost more over time if fees, interest, taxes, or a longer term are hidden in the structure.
Run conservative cases
Test at least one higher-cost or lower-return case before using the output for a purchase, refinance, investment, loan, or tax decision.
Rerun this page when the rate, price, term, fee, tax rule, income, expense, or expected holding period changes.
How to Use
- Enter original cost basis and accumulated depreciation taken.
- Enter FMV at decedent's death.
- Choose ownership structure (full step-up vs half step-up vs community property).
- Read stepped-up basis and approximate tax savings.
Frequently Asked Questions
Community property states?
AZ, CA, ID, LA, NV, NM, TX, WA, WI plus AK and TN by election. Surviving spouse gets 100% step-up on community property at first death.
Joint tenancy step-up?
Non-community-property states: surviving joint tenant gets 50% step-up (only the deceased's share). To get 100% step-up, hold property as community property with right of survivorship in CP states.
Depreciation reset?
Step-up wipes accumulated depreciation. New owner starts depreciation from zero with new basis (often higher annual depreciation than original).
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