Quick Summary: When someone passes, many assets—including real estate—receive a new tax “basis” equal to the property’s fair market value on the date of death (or an alternate valuation date, if used). That’s the “step-up.” It’s why a date-of-death appraisal is so helpful and why timing your sale can matter. Always confirm specifics with your CPA.
What is “basis” and why does it step up?
Basis is the number the IRS uses to calculate gain or loss when you sell.
After a death, real estate typically gets a new basis = market value on the date of death.
In some cases (e.g., community property), the rules can differ. Your CPA will apply the right treatment.
Why get a date-of-death appraisal?
It anchors your tax file with a professional opinion of value at that date.
It can reduce guesswork (and stress) later.
I’ll schedule and meet the appraiser so you don’t have to travel.
Selling soon vs. waiting—what changes?
Sell “soon”: If you sell near the stepped-up value, recognized gain may be minimal after selling costs.
Hold longer: If the market rises, new appreciation occurs after the step-up and may be taxable when you sell.
Improvements: Capital improvements may adjust basis; routine repairs don’t. Your CPA will guide you.
Common questions I hear (and how I answer)
“Do we get the decedent’s primary-residence exclusion?”
That exclusion applies to the owner’s principal residence. Heirs generally don’t inherit that benefit; if an heir later occupies the home as their own primary residence and meets the rules, it’s a different conversation—ask your CPA.
“Is step-up the same as property taxes?”
No. Step-up is about income tax when selling. Property tax is county-level and involves assessed value and transfer rules (e.g., parent-child exclusions). Separate topics, separate rules.
“Can we do this from out of state?”
Yes. I’ll coordinate appraisal, photos, showings, and a secure closing while you sign remotely.
Bottom line: A date-of-death appraisal plus a short talk with your CPA gives you a clear picture. I’ll handle the local logistics so you can focus on decisions, not details.
