04/22/2026
When you inherit property from a loved one, you may be eligible for what’s called a “step-up in basis.” This means the property’s value is adjusted to its fair market value as of the date of death, rather than what the original owner originally paid for it.
Why does this matter? Because capital gains tax is based on the difference between the sale price and the property’s value (its “basis”). Without an accurate valuation, you could end up paying significantly more in taxes than necessary.
Here’s a simple example:
Let’s say your parents bought a home years ago for $100,000. When you inherit it, the market value is $250,000.
Without a date-of-death appraisal, the IRS could treat your basis as $100,000. If you sell the home for $260,000, you might be taxed on a $160,000 gain.
With a proper appraisal establishing a $250,000 value at the date of death, your taxable gain could be only $10,000.
That’s a big difference.
A professional appraisal as of the date of death helps document this value and can significantly reduce your potential tax burden if you decide to sell. Many people aren’t aware of this, but it can make a meaningful financial difference.
If you’ve recently inherited property, obtaining a qualified appraisal is a smart step to help protect your financial interests.
