Step-Up in Basis Calculator
What is the new basis after a spouse dies, and how much gain disappears? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 6, 2026 · The full page, with methodology and sources · the terms · All tools
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The cost, the value at death, and how the asset was titled in; the new basis, the gain erased, and the tax a later sale saves out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- In plain words.
- When someone dies, the things they owned get a fresh tax cost equal to their value that day, so the profit that built up during their life is never taxed. How much of a jointly owned asset gets this fresh cost depends on how it was titled: all of it for something they owned alone, half for something owned jointly with a spouse in Illinois. This tool takes the original cost, the value at death, and the title, and shows the new cost and the profit that disappears.
- Why it matters.
- It changes what a survivor should sell first and what to hold. Selling the house or the stock with the new cost may owe nothing; selling something the survivor owned alone may owe a lot.
- An example.
- A home bought for $200,000, worth $800,000 when the first spouse dies, owned jointly: the new cost is $500,000. Half of the $600,000 profit is gone for tax purposes; the survivor's half keeps its old cost.
- Where it stops.
- It does not cover property owned jointly with someone other than a spouse, which follows who paid for it, or retirement accounts and annuities, which never get the fresh cost. A rental property has its own adjustment for depreciation.
The facts
Six quotable sentences on the step-up in basis.
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- Property acquired from a decedent takes as its basis the fair market value at the date of death (§ 1014(a)(1)); the gain that accrued during the decedent's life is never taxed. The same rule steps a basis down when the value fell.
- What steps up is the part of the asset that was the decedent's for estate purposes. An asset the decedent owned alone steps up in full; the survivor's own separate property does not step up at all.
- A qualified joint interest between spouses (joint tenancy with right of survivorship, or tenancy by the entirety) is included in the decedent's estate as to one-half (§ 2040(b)), so one-half of the asset steps up and the survivor's half keeps its old basis (§ 1014(b)(9)).
- Example: a home bought for $200,000, worth $800,000 at the first spouse's death, held jointly. The new basis is $500,000; $300,000 of gain disappears, and a sale at value leaves $300,000 of gain for the survivor (before the home-sale exclusion).
- In a community property state, both halves step up when at least half the property was includible in the decedent's estate (§ 1014(b)(6)). Illinois is not one; a couple's joint assets in Illinois are qualified joint interests, and only the decedent's half steps up.
- A joint tenancy with someone other than a spouse is included in the decedent's estate in full unless the survivor can show what they paid (§ 2040(a)), so the stepped-up fraction follows the contribution, not the title.
What steps up, by title
Each form of ownership and the share that steps up.
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| How the asset was held | Included in the decedent's estate | Steps up | Authority |
|---|---|---|---|
| By the deceased alone | All | All | § 1014(a)(1) |
| Joint with the surviving spouse (right of survivorship, or by the entirety) | One-half | One-half | § 2040(b); § 1014(b)(9) |
| Community property (not Illinois) | One-half | All, both halves | § 1014(b)(6) |
| Tenancy in common | The decedent's share | The decedent's share | § 1014(a)(1) |
| Joint with someone other than a spouse | All, less what the survivor proves they paid | The included part | § 2040(a); § 1014(b)(9) |
| By the survivor alone | None | None | § 1014 |
| An IRA, 401(k), or annuity (income in respect of a decedent) | All | None: no step-up | § 1014(c) |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/step-up-in-basis-calculator
- Citation
- Considerate Capital, "Step-Up in Basis Calculator," reviewed September 6, 2026, https://consideratecapital.com/tools/step-up-in-basis-calculator.
Link to a section
- The calculator https://consideratecapital.com/tools/step-up-in-basis-calculator#calculator
- The facts https://consideratecapital.com/tools/step-up-in-basis-calculator#facts
- By title https://consideratecapital.com/tools/step-up-in-basis-calculator#key-numbers
- How the step-up works https://consideratecapital.com/tools/step-up-in-basis-calculator#how-it-works
- Methodology https://consideratecapital.com/tools/step-up-in-basis-calculator#methodology
- Sources https://consideratecapital.com/tools/step-up-in-basis-calculator#sources
- Revision history https://consideratecapital.com/tools/step-up-in-basis-calculator#revision-history
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