Stepped-Up Basis Tax Savings Calculator

Stepped-up basis at death eliminates pre-death capital gains for heirs.

Original basis

FMV at death

Heir's sale price

Capital gains rate %

Total tax savings

$309,400

Tax without step-up

$333,200

Tax with step-up

$23,800

How the math works

Without step-up: (sale − original basis) × rate. With step-up: (sale − FMV) × rate.

Original $200k vs FMV $1.5M: gain $1.4M × 23.8% = $333k saved by stepped-up basis.

How to Use

Enter original basis.
Enter fmv at death.
Enter heir's sale price.
Enter capital gains rate %.
Read total tax savings.

Frequently Asked Questions

Step-up rules?

Inherited property: basis = FMV at decedent's death. Pre-death appreciation NOT subject to capital gains for heir. Surviving spouse: 50% step-up in joint accounts (full step-up in community property states). Living trust: full step-up at death of grantor. Lifetime gifts: NO step-up (carry-over basis). Strategy implication: hold appreciated assets until death (vs gifting during life) to capture step-up. State conformity: full conformity in most states; some states (notably WA) impose state estate tax separately.

How is this tax impact computed?

Tax outcomes depend on filing status, income bracket, depreciation schedule, basis adjustments, AMT exposure, and state conformity. Real estate tax planning typically involves cost segregation, 1031 exchanges, opportunity zone, depreciation recapture, passive activity rules, and entity structure (LLC vs partnership vs S-corp). This calculator provides directional analysis — final position requires CPA review.

State conformity?

States vary on conformity to federal tax code: California, NY, MA decouple selectively. Bonus depreciation: most states reduce or eliminate. QBI: most states don't conform. Section 1031: federal-only deferral, some states require state-level recapture. Property tax cap: state-specific (CA Prop 13, MI Headlee, FL SOH). Multi-state property requires apportionment analysis.

When to prioritize this strategy?

Tax strategies have setup cost, complexity, and audit risk. Cost segregation: $5–15k study, materially helps high-basis investors. 1031: 45/180 day deadlines, identification rules, qualified intermediary fees. Opportunity Zone: long hold required. Stack strategies: don't double-count benefits. CPA + tax attorney coordination essential for $1M+ strategies.