Step-Up in Basis Appraisals
A step-up in basis appraisal determines the fair market value of real estate as of the date of death. This value becomes the new tax basis for heirs when inherited property is sold or transferred.
When real estate is inherited, U.S. tax law generally allows the property's tax basis to be "stepped up" to its fair market value as of the date of death. This adjustment can significantly reduce the capital gains taxes owed if the property is later sold.
Because the value must reflect the market conditions that existed at the time of the owner's passing, a retrospective real estate appraisal is often required. This type of appraisal looks back in time and analyzes comparable sales and market behavior from the appropriate historical period.
Attorneys, CPAs, trustees, and heirs often request a step-up basis appraisal when determining the tax basis of inherited real estate. These assignments commonly arise in situations such as:
A step-up in basis appraisal typically involves developing a retrospective valuation with an effective date corresponding to the date of death. Comparable sales from the appropriate time period are analyzed to determine how the market valued similar properties at that time.
My work emphasizes paired sales analysis and detailed market research in order to support the appraisal conclusions with real market evidence. This approach allows the valuation to be clearly explained and documented if the report is later reviewed by attorneys, CPAs, or the IRS.
Most step-up basis assignments are performed as Date of Death appraisals, which establish the fair market value of the property as of the owner's date of death. These retrospective reports are frequently required for estate settlement and inherited property matters.
If you would like a broader explanation of how these reports work, when they are needed, and why they are commonly used for probate, estate settlement, and tax reporting, visit my Date of Death Appraisal page.
If you need a Date of Death appraisal for step-up basis reporting, you may also find these city-specific resources helpful:
Step-up basis and Date of Death appraisal services are provided throughout Alameda County including Oakland, Hayward, Castro Valley, San Leandro, Fremont, Union City, Newark, and surrounding East Bay communities.