602-312-9571When you inherit a home from a parent or other family member, the paperwork can feel endless. Somewhere in the middle of it, a CPA or attorney will usually ask a question that surprises a lot of heirs: what was the house worth on the date of death? That number often matters more than people expect, because it’s closely tied to something called the step-up in basis.
This guide explains, in plain language, what the step-up in basis means for an inherited home in Arizona, why the date-of-death value matters, and how an independent appraisal helps document it. It’s written by Firebird Appraisals & Consulting in Gilbert. Our lead appraiser, Gabe Trevizo, is an Arizona certified appraiser (license 22146) and a VA designated appraiser who has been appraising homes across Maricopa and Pinal counties since 2005. We’re appraisers, not tax professionals, so please use this as background for a conversation with your CPA or attorney, not as tax or legal advice.
What “Basis” Means for a Home
In tax terms, basis is generally the starting value used to figure out whether you have a gain or a loss when you sell property. For a home someone bought, the basis usually starts with what they paid, then gets adjusted for things like certain improvements over the years.
When the home is sold, the difference between the sale price (after selling costs) and the basis is what determines the gain. A higher basis generally means a smaller taxable gain. That’s why basis is something your CPA cares about a great deal.
What the Step-Up in Basis Is
For inherited property, the IRS rules generally work differently than for property you buy. Instead of carrying over the original owner’s purchase price, the basis of inherited property is generally the fair market value of the property on the date of the owner’s death. The IRS explains this in its publications on basis of assets and on survivors, executors, and administrators.
Because many homes are worth more when the owner passes away than when they were purchased, this reset is often called a “step-up” in basis. If the home’s value went down instead, the basis can step down. Either way, the date-of-death value becomes the key number.
There are exceptions and special elections. For example, some estates may be able to use an alternate valuation date instead of the date of death. Whether any of that applies to your situation is a question for your CPA or estate attorney. Our job is to provide a supported opinion of market value as of whatever effective date your advisor tells us to use.
Why Arizona Community Property Can Matter
Arizona is a community property state. Under federal tax rules, when one spouse dies and a home is held as community property, both halves of the community property may receive a new basis, not just the deceased spouse’s half. The IRS discusses this in its guidance on community property.
That can be significant for a surviving spouse who later sells the home. But how the home was titled, and whether it truly qualifies as community property, can change the answer. Your attorney or CPA should confirm how the rule applies before you rely on it. If they do need a date-of-death value for the full property, an appraisal can provide it.
Why an Appraisal Beats a Guess
When an heir sells an inherited house, it’s tempting to look up an online estimate for the date of death, or to use the county assessor’s value from the tax bill. Neither one is designed for this purpose.
- Online estimates are automated models. They don’t inspect the home, and they aren’t built to look back to a specific past date.
- Assessor values are prepared for property tax purposes and aren’t intended to represent market value for an estate.
- An agent’s price opinion is a marketing recommendation, not an appraisal.
A written appraisal from a licensed or certified appraiser documents how the value was reached, which comparable sales were used, and what the property was like on the effective date. If questions come up later, your CPA has a clear report to point to instead of a screenshot of a website.
How a Date-of-Death Appraisal Works
A date-of-death appraisal is a type of retrospective appraisal. That means the value is stated as of a date in the past rather than today. Here’s how we approach it:
- Confirm the effective date. The executor, trustee, or attorney tells us the date to use, usually the date of death.
- Research the market at that time. We look at comparable sales that closed around that date, along with listings and pending sales that show what the market was doing then, not what it’s doing now.
- Describe the home as it was. If the house has been cleaned out, repaired, or updated since the date of death, we ask about its condition at the time and clearly state any assumptions in the report.
- Write the report. You get a clear written appraisal stating the value as of the effective date. Our typical turnaround is about five business days.
If you also need to know what the home is worth today, for example because you plan to sell it, we can provide a current value as well. You can read more about how we handle these assignments on our estate, probate, and date-of-death appraisal page.
Timing: Don’t Wait Too Long
It’s possible to appraise a home as of a date in the past, but the sooner you order, the easier it is to describe the property accurately. Memories fade, photos get lost, and houses get renovated. If the home is going to be sold, repaired, or emptied, it’s helpful to get the appraisal started before major changes are made.
Some families also want the value early for other reasons, such as dividing the property fairly between heirs or helping a successor trustee decide whether to sell or keep the home. Having a supported number early can make those conversations calmer.
What to Have Ready When You Order
- The property address and the date of death (or other effective date your advisor wants)
- Who will rely on the report, such as the estate, the trustee, the heirs, the CPA, or the attorney
- Any updates, repairs, or changes made to the home, and when they happened, especially anything after the date of death
- Photos from around the date of death, if you have them
- HOA information and any known issues with the home as of that date
- Any deadline you’re working against
A house still full of belongings is fine. We appraise the real property, not the furniture or contents. For general tips, see our guide on how to prepare for a home appraisal in Arizona.
Local Market Knowledge Matters
Values around a past date depend on what was selling nearby at the time, and Valley neighborhoods can differ quite a bit. An older home in central Mesa, a newer build in San Tan Valley, and a custom home in Scottsdale each call for different comparable sales. We appraise inherited homes throughout the region, including Gilbert, Mesa, Chandler, Scottsdale, and San Tan Valley. See our full service area for cities in Maricopa and Pinal counties.
Frequently Asked Questions
Does every inherited home get a step-up in basis?
The general rule is that inherited property takes a basis equal to its fair market value at the date of death, but there are exceptions and elections. Your CPA or estate attorney should confirm how the rules apply to your situation.
Can you appraise a home as of a date years ago?
Often, yes, as long as reliable market data from that period is available. Tell us the date when you order and we’ll confirm.
Do I need to clean out the house before the appraisal?
No. We appraise the real estate, not the contents, so a home full of belongings is fine.
Can one heir order the appraisal?
Yes. Just let us know everyone who will rely on the report when you place the order. Our analysis stays independent no matter who orders it.
How long does a date-of-death appraisal take?
Our typical turnaround is about five business days. Share any deadline up front so we can plan around it.
Get a Supported Date-of-Death Value
If you’ve inherited a home in Arizona and your CPA or attorney needs its value as of the date of death, Firebird Appraisals & Consulting can help with an independent, clearly written appraisal for homes across Maricopa and Pinal counties. Call 602-312-9571 or request a quote online, and include the address, effective date, and who will rely on the report.