Free tool

Gift now or inherit later?

For appreciated assets — low-basis stock, a rental, land — the instinct to give while you're alive can hand your heir a hidden capital-gains bill. Gift it now and your heir keeps your original cost basis (the "carryover"). Let it pass at death and the basis "steps up" to the value that day, wiping out every dollar of unrealized gain. This calculator compares both paths and shows the capital-gains-tax difference.

Part of Family Matters' Living Inheritance tools — give while you're alive, the right way.

The asset

If your heir sells after death

Value at that point—
Cap-gains tax if you GIFT now—
Cap-gains tax if you INHERIT later—
Tax saved by waiting (step-up)—

Track basis, gifts & the step-up in one place.

Whether you gift now or hold for the step-up, the cost basis, gift-tax records, and the plan for each asset need to live somewhere your family and advisors can see. Family Matters does exactly that. Be the first to try it.

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Gift now vs. inherit later: how to decide

What is the step-up in basis?

When you die, the cost basis of most assets you owned "steps up" to their fair-market value on your date of death. Your heir can then sell with little or no capital-gains tax, because the built-in gain that accrued during your life is wiped out. It's one of the most powerful features in the tax code for appreciated assets — and it only happens if the asset passes at death, not as a lifetime gift.

What happens to basis if I gift the asset instead?

The recipient takes your carryover basis — your original cost. If you bought stock for $100,000 that's now worth $500,000 and gift it, your heir inherits the $100,000 basis. When they sell at $500,000, they owe capital-gains tax on the full $400,000 gain. The same shares inherited at death would have a $500,000 basis and trigger no gain on an immediate sale.

So is it always better to hold appreciated assets for the step-up?

For most families, yes — if your estate is comfortably under the federal exemption (about $15M per person, $30M per couple in 2026), holding appreciated assets for the step-up usually beats gifting them. The big exception is a taxable estate: if your estate will owe the 40% estate tax, gifting now can remove the asset and its future growth from your estate, and that estate-tax saving often outweighs the lost step-up. The calculator above flags which side you're on.

What about cash, or assets that haven't appreciated?

The step-up only matters for unrealized gains. Cash, or an asset worth roughly what you paid, has nothing to step up — so the tax math is a wash and you should give based on need and timing, not basis. The step-up question is specifically about low-basis, highly appreciated assets.

Does gifting use up my gift-tax exemption?

Yes. A gift above the annual exclusion ($19,000 per recipient in 2026, $38,000 for a couple splitting gifts) requires a Form 709 and draws on your ~$15M lifetime exemption — though it rarely means tax is actually owed. If you decide to gift, the Gift Tax Calculator shows the filing and exemption impact.

Keep reading

Should you gift or loan it? Try the decision tool Will your estate grow into a tax problem? Projector Gift Tax Calculator & Form 709 checker Gifting & gift tax: the complete guide Family loan vs. gift: the tax difference Give money without losing control

General information, not tax or legal advice. This is a simplified estimate: it assumes a single future sale at the projected value, ignores depreciation recapture, net investment income tax, state taxes, and any change in rates or the law, and assumes the asset receives a full step-up. Exclusion and exemption figures change; verify current numbers with the IRS and consult your CPA or estate attorney.