Can a surviving spouse in Nebraska do step-up basis on rental properties?

Yes. But since NE is not a community property state, the step up on occurs for the deceased 50% of the cost basis. Also understand that under no circumstances and with no exceptions will you change the original entry. TO reiterate, you will *NOT* change the original entry. You will add a new entry in the assets/depreciation section. Here's how.

Let's assume depreciation on the property started in 2009 meaning that at the time of the spouses passing there was already 10 years of depreciation taken.

If your cost basis is $100,000 with $30,000 allocated to the land, that means depreciation occurs on $70K over 27.5 years.

Spouse passed in 2019. An appraisal on the property performed by a qualified, licensed and certified property appraiser values the property at $150,000 with $40,000 allocated to the land.

That's an overall increase of 50% on the entire property (land and structure) and a 25% increase on the land only. The surviving spouse gets a step-up on half of that.

In the assets/depreciation section a completely new asset is entered. You can label it something like "basis increase thru inheritance".  Give it a cost basis of $25,000 (one half of the total increase to the entire property) and $5,000 of that allocated to the land (one half of the 25% increase in the value of the land). Depreciation starts on the date of passing of the deceased spouse for the next 27.5 years.