Shares that arrive by inheritance carry a figure you never paid for them, and that figure is the basis for inherited stock: what a share was worth on the date of death, not what the deceased paid. This page works the inherited stock stepped up basis out of the shares you type and the value a share carried at death, then carries it through the sale into the net proceeds, the gain and the tax at a rate you type. The other route through the same question is the cost basis for gifted stock, where nothing is reset at death and the donor's cost carries over instead. On a gift the basis on gifted stock can also be two figures rather than one, and the page names which of them the sale you describe is measured from. Every line of the arithmetic is printed under the result with your own numbers in it — no sign-in, nothing emailed, nothing saved.
What came to you, and by which route
How the shares came to youThe value on the date of death is what decides the basis. Add what the deceased paid and the page also prices the step itself.
Shares that came to youThe whole holding, or the part you are selling. Four decimals are kept, so a fractional position can be typed as it stands.
What a share was worth on the date of deathThe fair market value of one share on the date of death — the figure an executor or a brokerage statement can give you, and the whole basis of an inheritance. If the estate elected an alternate valuation date, use the value on that date instead.
What the deceased paid a share — optionalOnly used to measure the step itself and put a figure on it. It never enters the basis, which is the value at death whether the deceased bought at 12.00 or at 90.00.
What the donor paid a shareA gift carries the donor's original cost over to you. If you do not know it, a brokerage statement or the donor's own records are where it comes from — the page will not guess one.
What a share was worth on the date of the gift — optionalEnter it and the page runs the two-base test: if this is below what the donor paid, a loss is measured from this figure and a gain from the donor's cost, and a sale that lands between the two is neither.
The sale
What you sold a share forYour own sale price, typed in. No price is fetched and no market data is used anywhere on this page.
Selling fee or commission — optional
Given as a percent, the fee is taken on the gross proceeds. It comes off the amount realised, which is what the gain is measured against.
The rate you want applied — as a percentThis page keeps no rate table and picks no rate: it multiplies the gain by whatever rate you type. Long-term rates, ordinary rates, a state rate — what goes in the box is yours. Leave it empty and the basis, the step and the gain are still worked out.
Cost basis for these shares—
Basis a share—
The step itself — inherited only—
Gain on the sale—
Tax at the rate you typed—
After tax—
Start with the number of shares. Then the value a share carried at death (or, for a gift, what the donor paid), the price you sold at, and the rate you want applied.
The step, and what it is worth in money
An inheritance resets the basis to the value on the date of death, and it does so whether that value is above what the deceased paid or below it. The rise is the one everybody knows about. The fall is the one that gets left out: if the shares were worth less on the date of death than the deceased had paid for them, the basis steps down to that lower value, and the heir's gain when they sell is measured from there. Write the deceased's own cost into the box above and this page shows the step in both directions and to four decimals a share.
Having the step is only half of it. The other half is what the step is worth, and that is a multiplication on figures you supply: the shares, the difference between what the deceased paid and what a share was worth at death, and the rate you want applied. A step of 7,600.00 across a holding, at 15.00%, is 1,140.00 of tax that the death removed from a later sale. Nothing about that figure is a forecast — every input was a fact by the time it was typed — and the page prints it rather than describing it.
One caution, and it is the reason the deceased's cost never enters the basis itself. Attaching that cost to the basis is the single most common way to get an inherited holding wrong: the heir pays tax on the rise since death, not on the rise since the deceased bought in, and the difference across a long holding can be most of the gain. The page keeps the two apart, prints them apart, and lets you see which is doing the work.
A gift keeps the donor's basis — and can have two
A gift is not a death. Nothing resets: the donor's original cost carries over to you, so a share bought at 60.00 and given to you arrives with a 60.00 basis, whatever it was worth on the day it changed hands. That single rule covers most gifts and the page applies it as soon as you type what the donor paid.
The exception is what happens when the value on the date of the gift was lower than the donor's cost. There the same shares carry two figures, and which one is yours depends on the sale: the donor's cost measures a gain, the lower gift-date value measures a loss. Sell above the donor's cost and the gain runs from that cost. Sell below the gift-date value and the loss runs from that lower figure. Sell in between and there is neither a gain nor a loss to report, because the amount realised never cleared either threshold.
The middle zone is the part that catches people out, and it is why the page shows the two figures in money next to the proceeds rather than just naming them. A sale that produces neither a gain nor a loss is not an error and not a rounding artefact: it is what the rule does with a price that never reached either basis.
Worked example
Inherited. 200 shares came to you; the deceased paid 12.00 a share; a share was worth 50.00 on the date of death; you sold at 80.00 and the rate you typed is 15.00%.
The basis is the value at death, 200 × 50.00 = 10,000.00. The step itself is measured against what the deceased paid: 50.00 − 12.00 = 38.00 a share, which across the holding is 200 × 38.00 = 7,600.00, and at 15.00% that step carries 1,140.00 of tax. Net proceeds are 200 × 80.00 = 16,000.00, so the gain is 16,000.00 − 10,000.00 = 6,000.00 and the tax at 15.00% is 900.00, leaving 15,100.00.
Now put the same sale next to the one the deceased would have faced. Had they sold at 80.00 themselves, the gain would have run from their own 12.00 basis: 16,000.00 − 2,400.00 = 13,600.00, and at 15.00% the tax would have been 2,040.00 rather than 900.00. The step is the whole of the difference, 1,140.00, and it is the figure no article on the subject prints.
Inherited, the other direction. 100 shares, the deceased paid 70.00, a share was worth 30.00 on the date of death, and you sold at 30.00 with 22.00% typed in. The basis steps down to 100 × 30.00 = 3,000.00, the step is −4,000.00 across the holding, and the sale produces no gain and no loss — there is nothing here for a rate to be applied to, and the page says so instead of showing a tax of zero.
A gift with two bases. 100 shares, the donor paid 60.00, a share was worth 20.00 on the date of the gift. The carryover basis is 100 × 60.00 = 6,000.00 and the lower figure is 100 × 20.00 = 2,000.00. Sell at 40.00 and the proceeds of 4,000.00 sit between the two, so there is neither a gain nor a loss. Sell at 80.00 instead and the proceeds are 8,000.00, the gain is measured from the donor's 6,000.00 as 2,000.00, and at 15.00% the tax is 300.00. Sell at 15.00 instead and the proceeds are 1,500.00, which is below the lower figure, so the loss is measured from 2,000.00: 1,500.00 − 2,000.00 = −500.00.
Same shares, same donor, same gift date — only the sale price moved, and with it the basis the figure is measured from.
Which of the two you are holding
Inherited shares are ones you held because someone died. Gifted shares are ones the owner handed to you while they were alive, and they carry the donor's cost. There is a third case this page is not for: shares you bought yourself, where the basis is what you paid plus commission and nothing has been reset or carried over. That one belongs to the cost basis calculator, which works a basis out of your own purchase rows.
If the holding is part inherited and part bought by you, the two are not one basis: split the rows, run each part with the figures that belong to it, and add the results. The page takes one holding at a time, deliberately, because a single averaged basis across a stepped-up part and a bought part is a figure that does not exist on any return.
What this page does not do
No rate of its own. The rate is yours to type and the page holds no table and no bracket. It does not work out a long-term rate from your income, and it does not know whether the gain you are describing is long term or short term.
No state layer. Every figure here is one layer. A state that taxes the gain on top of the federal figure runs on its own rules, and the pages that deal with those are the long-term gains page and the tax by state page.
No estate tax and no return. Form 706, the alternate valuation election and the estate's own tax are the executor's question, not this page's. The page takes the value on the date of death as a figure you supply, whether that came from the date of death or from an elected alternate date.
No community-property split. In the states that run on community property, a surviving spouse's half can step up as well as the deceased's half. That changes which shares step up, not the value a share steps to, so if only part of your holding stepped up, run the parts separately.
No retirement accounts, no trusts, no NUA. Inherited IRAs are not a cost basis question at all, and the treatment of a trust or of net unrealized appreciation in employer stock has its own rules. None of it is worked out here.
No price data. Nothing is fetched. The value at death and the sale price are figures you type, and the page has no feed to check them against.
No account, nothing emailed, nothing saved. There is no sign-in and nothing you type leaves the browser. Nothing goes on a list and nothing goes to an inbox.
No advice. The page gives the arithmetic of a basis and a sale, not a recommendation, and it has no view on whether you should sell.
Rounding
Figures are rounded down, never up, the same rule as the rest of the site. Shares and a per-share figure are kept to four decimals; amounts and percentages to two. The basis is the shares times the value at death, both as you typed them, and the total is floored once at the end rather than built from rounded parts — so a basis you check by hand can land a cent above the printed figure, never below it.
Frequently asked questions
Does an inheritance ever give a lower basis than the deceased had?
Yes, and it is the half of the rule that goes unmentioned. The basis becomes the value on the date of death, so if the shares had fallen below what the deceased paid, the basis falls with them and the heir's gain is measured from the lower figure. The page shows the direction of the step and its size in money as soon as the deceased's own cost is typed in.
What is a stepped up basis worth?
It is worth the tax on the gain it removes, which is the difference between the value at death and what the deceased paid, multiplied by the shares and by the rate you type. On 200 shares with a 38.00 a share step and a 15.00% rate that is 1,140.00. The step does not remove the gain since death; only the gain before it.
What if I do not know what the donor paid?
Then a gift cannot be worked out here, and the page says so rather than assuming a figure. The donor's cost is the basis of a gift, so it has to come from somewhere real: the donor's records, a brokerage statement, or the gift tax return if one was filed. If it turns out to be unknown and unknowable, that is a question for a tax professional, not for a calculator.
Why does a sale between the two figures produce nothing?
Because a gift with a gift-date value below the donor's cost has two bases rather than one. The donor's cost sets the point above which there is a gain, the lower gift-date value sets the point below which there is a loss, and a sale between the two clears neither. The result is neither a gain nor a loss — not a small gain, and not a small loss.
Does this replace a 1099-B?
No. Your broker reports the sale, and for an inherited or gifted holding the basis on that form is often blank or wrong, because the broker was never told what the shares were worth at death or what the donor paid. This page works out the figure that goes in that column from the numbers you have; it does not file anything and has no connection to your account.