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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.
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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