Step Up Basis At Death Calculator

Heirs get basis stepped up to date-of-death value, eliminating capital gains.

Current basis

FMV at death

Capital gains rate %

Tax savings from step-up

$2,261,000

Unrealized gain

$9,500,000

New basis

$12,000,000

How the math works

Unrealized gain = FMV − basis. Tax savings = gain × capital gains rate.

$12M − $2.5M = $9.5M unrealized × 23.8% = $2.26M tax savings from step-up.

How to Use

Enter current basis.
Enter fair market value at death.
Enter capital gains rate %.
Read tax savings from step-up.

Frequently Asked Questions

How it works?

At death, heir inherits property with basis stepped up to fair market value. Accumulated capital gains (purchase price to FMV) never taxed. Heir can sell immediately at no capital gain, or continue depreciating from higher basis.

Planning implications?

Hold appreciated property until death to eliminate lifetime capital gains. Don't 1031 into property intended to be held for estate — step-up already eliminates gains. Critical for long-term real estate families.

Exceptions?

Community property: 100% step-up for both halves at first death (CA, TX, AZ). Non-community property: 50% step-up for surviving spouse's half. IRD (income in respect of decedent): no step-up on deferred income (e.g., pension, IRAs).