Date-of-death value

What it means

Assets are generally valued as at the date of death rather than as at the day they are sold or distributed.

For publicly traded securities that is a matter of record. For a house, a business or personal property it usually needs an appraisal.

Federal estate tax law allows an alternate valuation date in some circumstances, which is an election with conditions rather than a free choice.

Why it matters

It sets the new basis for inherited property, which decides the capital gains tax on a later sale. Getting the valuation documented at the time is far easier than reconstructing it years later.

It also determines whether an estate is over a small-estate threshold, and therefore which procedure applies.

When you are likely to meet it

• When an inventory has to be filed.
• When an inherited house or share portfolio is sold.
• When a small-estate threshold is close.

Related terms

• Alternate valuation dateAn election to value an estate six months after death instead of on the day of it.
• AppraisalA professional opinion of what something was worth on a particular date — usually the date of death.
• Assessed valueWhat a taxing authority says a property is worth, which is rarely what it would sell for.
• EstateEverything the person owned at the moment they died, treated as one thing that has to be settled.
• Estate taxA tax on the value of what somebody left, paid by the estate before anything is distributed.
• Fair market valueWhat a willing buyer would pay a willing seller, neither under pressure and both knowing the facts.
• Gross estateEverything counted before anything is subtracted — which is not the same as what the family ends up with.
• Inventory and appraisementA list of everything in the estate with a value against each item, filed with the court or given to the beneficiaries.
• Step-up in basisThe tax rule that resets an inherited asset's value to what it was worth on the date of death.

Sahvelo guidance that uses this

• Taxes after a death