Home cost basis adjusted for step up

Forum|Forum|29 days ago
June 21, 2026
2 replies
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TurboTax Deluxe Desktop does not include a line item to adjust a home cost basis for step up. I believe this is a significant problem that should be addressed. The software includes a question about the timing of a spouse’s death. Specifically, did the death occur within the past two years so the filer includes the correct amount ($250,000 vs. $500,000) of capital gain exclusion. A similar question or line item should be added so the filer does not forget to include the step up basis adjustment.

I have used TuboTax for more than thirty years. I have always found it very helpful and easy to use. The questions help with filing an accurate return. The omission of the step up basis adjustment is a failing and needs to be corrected.

NCperson

Level 15

would you also suggest that similar questions be developed for stock / equity gains? same step-up applies in the case of a spouses death.

what about questions about loss carry forward when a spouse dies? the loss carry foward benefit expires in certain circumstances.

does all that need to be corrected as well? just curious.

M-MTax

Level 15

Are these questions rhetorical? If not, financial institutions can, and have, made adjustments to the bases for securities. It should be noted that the basis can be stepped up OR down, as the asset is marked to the FMV on the date of death, whether that value is higher or lower on that date.

Further, loss carryforwards (capital and net operating) really don’t exist postmortem; they die with the decedent if not used on the final return. There is a rather complex and unusual exception for suspended passive activity losses but that is entirely different.

NCperson

Level 15

yes, rhetorical. My point is ‘step up” is a much larger and complex topic than just the house step up when a spouse passes and the home is sold within 2 years of the passing.

M-MTax

Level 15

These type of records need to be retained outside of products like TurboTax since a variety of scenarios are possible, from the form of ownership to the state of ownership (e.g., community property) to the time a sale is affected (e.g., the $500k exclusion typically applies if sold within two years of death but not remarried).