Estate & Probate Appraisal › Stepped-Up Basis Appraisal
What is a date-of-death appraisal?
A date-of-death appraisal is a certified, USPAP-compliant opinion of a property's fair market value on the day the owner died, not today. Heirs use it as their stepped-up cost basis; executors use it for the Maryland inventory and any estate tax filing.
This page covers the cost-basis side: how the value is built and what it is measured against. For fees, turnaround and county coverage, see the date-of-death appraisal service page.
How the step-up works
Capital gain is the sale price minus the tax basis. When property passes at death, the heir's basis generally resets to its fair market value on the date of death instead of the owner's original cost, so appreciation during the owner's lifetime is not taxed when the heir sells. Inherited property also gets long-term treatment however briefly the heir holds it.
The reset works in both directions. If the property was worth less at death than the owner paid for it, the basis steps down, which is one more reason to document the actual value rather than assume it.
Which property steps up
- Owned outright at death: generally steps up to the date-of-death value.
- Revocable living trust: generally included in the grantor's estate and stepped up. See stepped-up basis for trust-held property.
- Owned jointly with a spouse (tenants by the entirety or joint tenants): only the portion included in the decedent's estate steps up. The survivor keeps their original basis on their own share.
- Given away during life: generally keeps the donor's basis, with no step-up at death.
- Irrevocable trust: depends on the trust's terms and whether the property is included in the estate.
These are general rules. How they apply to a particular family is a question for the CPA or estate attorney; the appraisal supplies the value they work from.
How a past value is built
A date-of-death appraisal looks backward. The appraiser inspects the property now but values it as the market and the property stood on one specific day. Three disciplines make that figure hold up.
Comparable sales anchored to the date
The appraiser selects sales that closed on or before the date of death, close in time and similar in location and type, then adjusts for the market's direction between each sale and the date of death. In a rising or falling market, those time adjustments matter as much as the comparables themselves.
Condition at death
Condition is part of value, and the house the appraiser sees today may not be the house that existed on the date of death. Heirs may have cleaned out, repaired or renovated it, or it may have deteriorated since. The appraiser reconstructs the date-of-death condition from evidence: photos from around that time, inspection reports, repair invoices and permits, insurance records, listing photos, and the recollections of people who saw the home. Where condition cannot be verified, the report states what was assumed.
No hindsight
Value reflects what buyers and sellers knew and reasonably expected on the date of death. USPAP guidance on retrospective appraisals (Advisory Opinion 34) treats later sales and events with caution: they cannot drive the conclusion, and at most they may confirm a trend that was already underway on the effective date. That discipline is what lets the figure stand up months or years later.
Why the documentation matters
The tax benefit rests on one figure. A report built on dated comparables, a reconstructed condition and a clear effective date is far harder to challenge than a round number or an online estimate.
Appraisal vs. CMA vs. tax assessment vs. Zestimate
Four different numbers get attached to the same house. They are not interchangeable as support for a stepped-up basis.
| Source | Prepared by | Tied to the date of death? | As support for the basis |
|---|---|---|---|
| Certified appraisal (USPAP) | Licensed appraiser, independent of the heirs | Yes. The effective date is the date of death. | Strongest. Documented comparables, condition analysis and reasoning. |
| Agent CMA or BPO | Real estate licensee | Usually the current market, for listing or pricing. | Weaker. An agent's opinion is not an appraisal and is not prepared to appraisal standards. |
| SDAT tax assessment | State assessors, reassessed on a three-year cycle | No. A mass-appraisal figure, typically without an interior inspection. | Weaker. May be usable for some inventory purposes, but not date- or condition-specific. |
| Zestimate or other AVM | Algorithm | No. No inspection and no date-of-death condition. | Weakest. An estimate, not documentation. |
The Register of Wills lets a personal representative use the latest assessment, or a contract price, for the estate inventory in some situations (see below). That is a probate convenience. It does not make the assessment a good measure of what the house was worth on the day of death.
Alternate valuation date and Form 706
The six-month alternate valuation date
Under IRC §2032, the executor of an estate that files a federal estate tax return may elect to value the assets six months after death instead of at death, but only if the election lowers both the gross estate and the estate and generation-skipping transfer taxes. It is made on the return and cannot be revoked.
Property sold or distributed within those six months is valued as of that date. Because the election has to reduce estate tax, it is rarely available: the federal exemption is $15 million per person for 2026, and most estates owe no federal estate tax. When it is elected, the heirs' basis follows that alternate-date value, so tell your appraiser before ordering which date applies. Whether to elect is a decision for the CPA or estate attorney.
Form 8971 and basis consistency
If the estate files a Form 706 that triggers the rule, the executor reports each asset's value on Form 8971 and gives every beneficiary a Schedule A, within 30 days of the return's due date (with extensions) or its actual filing, whichever comes first. Under IRC §1014(f), a beneficiary generally cannot claim a higher starting basis than the value reported. Returns filed only for portability, generation-skipping allocation or as a protective filing are excluded. In effect, the executor's valuation becomes the number the heirs are held to, which is a good reason to get it right before it is filed.
Maryland specifics: the inventory and inheritance tax
The Register of Wills inventory
Within three months of appointment, the personal representative files an inventory listing the estate's property at gross fair market value on the date of death. For real property, the Register of Wills calls for an appraisal reflecting the actual date-of-death value. It also allows the most recent tax assessment, or the contract price if settlement occurs within a year of death, in some cases. Ask the estate attorney which applies. If the heirs will sell, or the estate may be taxed, the appraisal does double duty: it satisfies the inventory and supports the basis.
Maryland inheritance tax
Maryland charges a 10% inheritance tax on property passing to people outside the exempt relationships. Spouses, children and other lineal descendants, parents, grandparents and siblings are exempt; nieces, nephews, cousins, friends and unmarried partners generally are not. For those heirs, a defensible date-of-death value matters twice: once for the tax and again for the basis.
Maryland estate tax
Separate from the inheritance tax, Maryland has its own estate tax with a $5 million exemption that is not indexed for inflation, well below the federal exemption. Larger estates should plan with an estate attorney. The appraisal supplies the real estate value; confirm current figures with your attorney.
What to send the appraiser
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- Date of deathAnd a copy of the death certificate, if you have one.
- Property address and how title was heldThe deed, or at least: sole owner, tenants by the entirety, joint tenants, or trust.
- Who is orderingLetters of administration (personal representative) or trust documents (trustee), plus the estate attorney's or CPA's contact.
- Photos from around the date of deathInterior and exterior, listing photos, or family photos that show the rooms. Dated, if possible.
- Repair and condition recordsInvoices, permits, inspection reports, insurance claims, and utility records if the home sat vacant.
- Anything that changed since deathClean-outs, repairs, renovations, damage, tenants or occupants.
- Major updates and approximate datesRoof, kitchen, baths, mechanical systems. They help the appraiser judge condition at death.
- Prior valuesAny earlier appraisal, assessment notice, or sales contract.
- AccessKeys or lockbox, and who can meet the appraiser at the property.
Missing items are fine. An appraiser can work from partial records, and the sooner the work starts, the easier they are to gather.
Common questions
What is a date-of-death appraisal, and how does it set the cost basis?
A date-of-death appraisal is a certified opinion of a property's fair market value on the exact day the owner died. For inherited property, federal tax law generally resets the heir's cost basis to that value, so when the heir sells, gain is measured from the date-of-death value rather than the original purchase price. The appraisal is how that value is documented.
Is a Realtor's CMA or the tax assessment enough to support the stepped-up basis?
A CMA is a real estate agent's price opinion, not an appraisal, and the SDAT assessment is a periodic mass-appraisal figure that is not tied to the date of death or the home's condition then. The Register of Wills allows an assessment or a contract price for the estate inventory in some situations, but for supporting an heir's tax basis a certified appraisal is the stronger documentation. Ask the estate's attorney or CPA which figure they need.
Does property held in a trust or owned jointly with a spouse get a full step-up?
Not always. Property owned outright or held in a revocable living trust generally receives a step-up. For a home owned by spouses as tenants by the entirety or joint tenants, only the portion included in the decedent's estate steps up, and the survivor keeps their original basis on their own share. Irrevocable trusts depend on how the trust is written. Your CPA or estate attorney should confirm how this applies to your family.
When is the six-month alternate valuation date used?
Rarely. Under IRC section 2032, the executor of an estate that files a federal estate tax return may elect to value assets six months after death, but only if the election lowers both the gross estate and the estate and generation-skipping transfer taxes. Most estates owe no federal estate tax, so the date of death is the only valuation date. If an election is made, tell the appraiser before ordering so the effective date is correct.
Can the appraisal be done months or years after the death?
Yes. A retrospective appraisal is routinely completed months or even years after death, using archived sales and records from that period. Ordering sooner helps because photos, repair invoices and people's memories of the home's condition are easier to gather. Waiting does not make the step-up disappear, but it can make the condition evidence harder to reconstruct.
Related valuations
Sources
Checked on October 3, 2026. Rules change; confirm current requirements with your CPA or estate attorney.
- IRS Publication 551, Basis of Assets (inherited property, joint tenancy, holding period)
- IRS Instructions for Form 8971 and Schedule A (basis consistency, filing rules)
- 26 U.S. Code §2032, Alternate valuation
- USPAP Advisory Opinion 34, Retrospective and Prospective Value Opinions (The Appraisal Foundation)
- Maryland Registers of Wills: Administration of Estates (inventory, inheritance tax)
- Frame & Frame: Maryland vs. federal estate tax (exemption amounts; law-firm summary)