What the federal basis rule says
When you inherit a house, the IRS generally treats your basis as the home's fair market value on the day the owner died, and that holds even if no estate tax return is filed. The executor can switch to the alternate valuation date only by filing Form 706 and electing it there (IRS basis FAQ). The statute behind the rule is 26 U.S.C. 1014. If you later sell for more than your basis, the difference is a taxable gain.
The word "step-up" is shorthand, and it promises nothing. Basis follows the value at death, and that value can be lower than what the owner paid. The appraisal reports the value it finds; your tax adviser works out what it means for your return.
Under a law Congress passed in 2015, an heir's basis in certain inherited property must, in some circumstances, match the value finally set for federal estate tax purposes. If the executor sends you a Schedule A to Form 8971, ask your tax adviser how it affects the basis you report.
When an alternate date applies
The alternate date is six months after the death, or the day the property was sold or distributed if that came first (26 U.S.C. 2032). The executor can elect it only on the estate tax return and only if the choice cuts both the gross estate's value and the tax due; the election is irrevocable. Whether it applies is your adviser's question. The appraisal values the date you are given; if both dates are under discussion, ask about valuing each one.
What North Carolina changes, and what it does not
- No state death tax. North Carolina's repealed estate tax does not reach anyone who died on January 1, 2013 or later, and its repealed inheritance tax does not reach deaths on January 1, 1999 or later (Article 1A; Article 1). No state valuation date competes with the federal one.
- No federal inheritance tax. What the federal government taxes at death is the estate, through the estate tax, and only above the year's threshold, which changes annually. For a U.S. citizen or resident who dies in 2026, that figure stands at $15,000,000 (IRS threshold table). Inheriting the house is generally not income to you, although any rent it brings in later is taxable (Publication 525).
- One value, more than one use. The same date-of-death figure can go on the estate inventory filed with the Clerk of Superior Court in Cumberland County. If the personal representative hires an appraiser for it, the appraiser's name and address are listed beside the asset (G.S. 28A-20-4). Our probate appraisals page covers that filing.
- A home the couple owned together. North Carolina is not on the IRS list of community-property states (Publication 555). For a house a married couple held as tenants by the entirety, IRS Publication 551 includes one-half of its value in the first spouse's gross estate, so a surviving spouse should not assume the whole house takes a new basis. Ask your tax adviser how basis applies to a home you owned with your spouse.
- A home given away during life. A gift does not take a date-of-death basis. When the home is worth at least the giver's adjusted basis at the time of the gift, the recipient's basis is generally the giver's adjusted basis (Publication 551). If you or your spouse gave the house to the person who died within a year before the death, the IRS points to a separate rule in the same publication.
Questions every retrospective report must answer
Which date?
The date of death, the alternate date, or both. Your adviser names it; the report states it as the effective date.
How did the house look back then?
A home may have been repaired, emptied or renovated since the death. Photos from that time, contractor invoices, insurance claims and an old listing help describe it as it stood.
What did the market look like then?
The opinion depends on the sales and market conditions of the effective date's period. A later sale may help confirm what the market was doing, but current prices cannot stand in for a past-date value.
Cumberland County records that help
- The deed. The Cumberland County Register of Deeds holds land records that go back to 1754 (ccrod.org). The deed shows how title was held, which your adviser needs for the spouse questions above.
- The tax record. Cumberland County's current tax values reflect the market as of January 1, 2025, the date of its 2025 revaluation (revaluation FAQ). A county tax value is set for a revaluation date and for property tax purposes, so it is a record to review, not a date-of-death appraisal.
Before you call, pull these together
- The address, the kind of property and the date of death.
- Whether the alternate valuation date or a second date is under discussion.
- Who will rely on the report: the heirs, the executor, the estate's attorney or a CPA.
- Changes made since the death, with dates, photos and receipts.
- Access to the house, and whether it is occupied, vacant, listed or already sold.
How a past-date assignment works
- Scope. We confirm the address, effective date, intended users and deadline, and you receive a written scope, fee and delivery estimate.
- Inspection and history. The house is inspected where possible, and your records show how it looked on that date compared with later work. If the house has already been sold, say so at the start; the scope then depends on the records available.
- Research. Sales and records from that period are analyzed, and the report explains the path to the number.
- Review. Check the stated date, the purpose and any assumptions or limiting conditions, and raise factual questions with the appraiser.
Pricing and timing
A retrospective report's price depends on the date and the records. Ask for a written scope, fee and delivery estimate. A date further back, two effective dates, missing records or a filing deadline can each lengthen the research. A date-of-death value often serves the inventory, the heirs' basis and a family sale together; whether one report can cover several uses is a question for your adviser and the appraiser. Related pages: estate appraisals and the full list of appraisal services.
The address and your adviser's date come first
Call 910-900-5100 or request a retrospective appraisal quote. Tell us the Fayetteville address, the date your tax adviser gave you and how the value will be used.