IRS step-up appraisals in Anaheim.

A step-up value is a past value

When a loved one's house passes to you, the tax question is usually about a past date, not today's market. For federal income tax, an inherited house carries a basis tied to that date. Section 1014 of the Internal Revenue Code generally ties an heir's basis to the property's fair market value at the date of death. If the executor elects alternate valuation under section 2032 on an estate tax return, the date moves to six months after that date. As IRS Publication 551 explains, basis is what later measures gain or loss when the property is sold.

"Step-up" is the everyday name, but the reset simply follows the value on that date. If the house was worth less on that date than the owner's own basis, the heir's basis comes out lower, not higher. A step-up appraisal, sometimes labeled a date-of-death or retrospective appraisal, sets out an opinion of what one property was worth on that past date. Ask your tax adviser to pin down the date and the purpose before you order. The statute is at 26 U.S.C. 1014.

California couples: both halves can be reset

For a married couple's Anaheim home held as community property, the reset can reach both halves. Under section 1014(b)(6), the surviving spouse's one-half share is treated as acquired from the late owner too, so the whole house can take the stepped-up basis. The condition concerns the late owner's gross estate: at least half of the community interest must be includible in it. Publication 551 lists California among the nine community property states and notes that this applies whether or not a return must be filed. How the home was acquired and held decides whether it was community property, so your tax adviser should confirm that before anyone relies on a full adjustment.

Three facts the report must fix

The effective date

Normally it is the date of passing. Under section 2032, an executor filing an estate tax return can elect a date six months after that instead, and anything sold, distributed or otherwise disposed of before those six months run out is valued as of that disposition. Once made, the election cannot be undone, and the statute permits it only if the gross estate and the combined estate and generation-skipping transfer tax both go down. It is not a way to pick whichever figure suits. See 26 U.S.C. 2032.

The house on that date

Paint, flooring, a new roof or a remodeled kitchen added after the owner's passing change what an inspection finds today. Bring dated photos, listing records, inspection reports, invoices and permits. The City's Property Info map, linked from the service-area page, shows recent building permits for an address, and the Orange County Assessor Department's parcel page links to ParcelQuest for parcel data.

The market on that date

Comparable sales and market conditions are taken from around the effective date. For a house in one of Central Anaheim's four historic districts, the pool of truly similar sales near a given date can be small, and the report should say how that was handled.

Why September 2026 cannot answer for another date

Anaheim's service-area page saves RPR's September 2026 Sold Listings figures for the city: a median sold price of $980,000 from 50 sold listings, and a median of $594 per square foot. Source: RPR market trends for Anaheim, boundary 50602000. Retrieved October 7, 2026 at 08:29:20.164 UTC. Those numbers describe one month across the whole city, single-family homes and condominiums together. A retrospective assignment studies the market around your effective date and the particular house that was inherited.

Estate tax returns and their calendar

The Instructions for Form 706 set the filing threshold at more than $15,000,000 of gross estate, adjusted taxable gifts and specific exemption combined, for a U.S. citizen or resident who passes away in 2026. An executor who elects to transfer the deceased spousal unused exclusion (DSUE) amount to the surviving spouse files regardless of the estate's size. The return is due within nine months of the date of passing, and Form 4768 requests an automatic six-month extension of time to file. Schedule A asks for an explanation of how real estate values were determined and for copies of any appraisals.

Section 1014's basis rule does not depend on a return being filed, so heirs may want a supportable value as of that date either way. Whether a return is required, and what it reports, is for your attorney or tax adviser to decide; an appraisal supplies evidence of value, not a tax result.

No state inheritance tax in California

Heirs of an Anaheim home owe no California inheritance tax. Voters did away with the state inheritance and gift tax law in 1982 through Proposition 6, which also forbids the state and local governments from imposing inheritance taxes; the Assembly Revenue and Taxation Committee's revenue guide sets out that history. The State Controller's Office adds that owners who passed away on or after January 1, 2005 left no requirement to file a California estate tax return. Congress has enacted no inheritance tax either. Its levy is the estate tax, which reaches the transfer of the taxable estate; the executor pays it under 26 U.S.C. 2001 and 2002, and it is triggered only when the estate tops the $15,000,000 threshold given above for a 2026 passing. Publication 525 treats the inheritance itself as generally not income to the heir (rent the house earns later is income), and a sale is taxed on the gain above the basis that this appraisal documents.

Two California rules that sit alongside

If the estate is in a formal probate, the house's inventory value comes from a probate referee appointed for the county (the court can waive that appointment), and Anaheim cases are heard at the Costa Mesa Justice Complex; see probate appraisals. Property tax runs on its own track: when a child moves into a parent's former home, Proposition 19 can change the tax, the BOE counts the date of passing as the transfer date, and the Orange County Assessor Department handles the claim. The estate appraisal page sets out the conditions.

What to gather

• The address, the parcel number and the date of passing.
• The effective date your adviser has identified, and whether alternate valuation is being considered.
• How title was held, if your adviser is looking at the community property rule.
• Photos, listings, inspection reports, permits and invoices from around the effective date.
• Changes since then, with approximate dates.
• Who can provide access, and any filing deadline.

Steps from request to report

1. Confirm the assignment. We agree on the property, effective date, intended use, intended users and deadline; you then receive a written scope, fee and delivery estimate.
2. Visit and rebuild the picture. After walking through the house, the appraiser uses your records to describe it as of the effective date.
3. Research the period. Sales and market conditions around that date are analyzed and reconciled.
4. Review. Check the effective date, intended use, assumptions and limitations, and send factual corrections to the appraiser.

USPAP governs how each report is prepared. That is a professional standard, not an assurance that the IRS, a court or any other recipient will accept a conclusion.

Fees and timing

According to the site's FAQ, "Fees depend on property complexity, intended use and deadline." A past effective date can add research, so ask for a written scope, fee and delivery estimate, then check the calendar before a filing date depends on it.

Send the address and the effective date

If a house has just come to you, share the Anaheim address and the date your tax adviser wants valued. You do not need every record in hand to ask. We will set out the scope from there and explain each step in plain terms.

Request a retrospective appraisal quote · Call 714-844-1136

The California sections on this page were written with AI assistance for Eagle Home Appraisal Anaheim.