Utah step-up basis calculator
Estimate the capital gains tax savings your heirs get from documenting the IRC § 1014 date-of-death value on inherited Utah real property. Numbers approximate — the real appraisal establishes defensible values.
Estimated tax savings from documenting step-up basis
How this works
The step-up basis under IRC § 1014 resets the heirs' cost basis in inherited property to its fair market value on the date the decedent died. Without a documented date-of-death value, the IRS can argue the heirs' basis is the decedent's original purchase price — which for property held for decades can be a fraction of current value. The gap between those two numbers is what the heirs pay capital gains tax on when they sell.
The documentation matters. A defensible date-of-death value requires a USPAP-compliant retrospective appraisal from a Utah-licensed appraiser. An informal estimate from Zillow or a real-estate agent typically isn't enough to defend against IRS scrutiny — especially for properties sold within 3-5 years of the death, where audit selection is more likely.
The math is meaningful. A Utah home the parent bought for $220,000 in 1998 might be worth $580,000 at the date of death in 2020 and $640,000 when the heirs sell in 2026. Without a documented step-up, the taxable gain is $420,000 ($640K − $220K). With documented step-up, the taxable gain is $60,000 ($640K − $580K). At a 15% federal capital gains rate, the tax savings is $54,000 — many multiples of the appraisal fee.
What the calculator estimates and what it doesn't
The calculator uses federal capital gains rates (0%, 15%, or 20% depending on income) applied to the gain differential. It doesn't include Utah state capital gains tax (4.65% flat), the 3.8% Net Investment Income Tax that applies to high-income filers, or the specifics of any depreciation recapture on rental properties. The estimated savings is a starting point for whether the retrospective appraisal fee is worth it — a formal tax professional consultation is the actual answer.