Finance category
Mortgage, loan, investing, tax, and money calculators.
QOF Basis Step Up Calculator
QOF investments get basis step-ups at key holding milestones.
Basis step-up
$300,000
Step-up %
0.15%
Taxable reduced basis
$1,700,000
How the math works
Pre-2020: 10% step-up at 5 yrs, 15% at 7 yrs. Basis step-up = gain × step-up %.
$2M × 15% (7-yr hold, pre-2020) = $300k basis step-up. Taxable amount reduced to $1.7M.
How to Use
- Enter invested gain.
- Enter holding years.
- Read basis step-up.
Frequently Asked Questions
Step-up schedule?
5-year hold (pre-2020 investment): 10% basis step-up. 7-year hold (pre-2020): 15%. Post-2020 investments: only deferral until 2026, no step-ups. 10-year hold: full basis step-up to FMV (post-investment appreciation exempt).
Basis mechanics?
Invest gain $100. Basis initially $0. 5 yrs later: basis $10. 7 yrs: basis $15. At 2026 recognition: tax on $85 ($100 − $15 basis). 10-year sale: basis stepped up to FMV, gain exempt.
Practical benefit?
Pre-2020 investor gets 15% reduction in deferred tax on 7-year hold. For $10M investment at 23.8% rate: $357k lower tax bill. Plus 10-year exemption on appreciation. Large combined benefit.
How often should I rerun this?
Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.
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