If you learn one tax concept before selling an inherited home, make it this one. It routinely saves Long Island families tens or hundreds of thousands of dollars.
This page is part of the Probate Real Estate New York guide. Not legal or tax advice — consult an estate attorney or tax professional for your situation.
What “Stepped-Up Basis” Means
Normally, capital gains are measured from what an owner paid. When you inherit, the basis is “stepped up” to the property's fair market value on the date of death — erasing decades of appreciation for tax purposes.
A Long Island Example
Parents buy a Levittown home for $18,000 in 1968; it's worth $650,000 at death. Your stepped-up basis is $650,000. Sell for $650,000 and your capital gain is essentially zero.
Why It Rewards Selling Promptly
The step-up locks in value as of the date of death. Sell soon and gain stays near zero; hold for years and future appreciation becomes taxable. Get a dated valuation to document the basis.
A documented market valuation at (or near) the date of death establishes the stepped-up basis for the IRS, beneficiaries, and the court. It's a small step with major tax value.
Handling an Estate Property Sale on Long Island?
Montauk Dunes Real Estate provides compassionate, expert guidance for executors and families in Nassau County, Suffolk County, and the Hamptons — including traveling notary services for estate documents. Call for a free, confidential consultation.
Call 646-234-2160Frequently Asked Questions
Does New York recognize the stepped-up basis?
Yes — it follows federal basis rules, so the step-up applies for both federal and New York tax.
Do both spouses' deaths trigger a step-up?
In non-community-property states like New York, a step-up generally applies to the deceased owner's share.
How do I prove the stepped-up basis?
With a professional valuation or appraisal dated at the time of death. We provide documented market analyses for estates.