Gifted Property Basis Calculator

For a gain, your basis generally starts with the donor's adjusted basis (carryover basis) — not the property's value on the day you received it. Add any improvements you made after the gift, and subtract selling costs when figuring gain, the same as if you had owned the property since the donor acquired it.

This is the dual-basis rule. If the property's fair market value on the gift date was LOWER than the donor's basis, you must use the donor's basis for a later gain but the lower gift-date value for a later loss. Selling for a price between those two figures produces neither a recognized gain nor a recognized loss — the sale falls in the no-gain/no-loss zone.

It can, but only for the portion of gift tax attributable to appreciation in the property's value while the donor owned it — not the full gift tax paid. This adjustment applies only when the donor's basis (not the lower gift-date value) is used, and only to gifts where gift tax was actually paid, which is uncommon given the annual exclusion and lifetime exemption most donors have available.

Yes — when you use the donor's carryover basis for a gain, you also "tack on" the donor's holding period, meaning your holding period starts from when the donor acquired the property, not from the gift date. This often lets you qualify for long-term capital gains treatment even if you sell shortly after receiving the gift.

Gifted property generally carries over the donor's original basis (a potential tax disadvantage if the property appreciated significantly). Inherited property instead usually gets a basis "step-up" (or step-down) to fair market value at the date of death, which can eliminate built-in gain entirely. This is one of the most consequential differences between gifting an appreciated asset during life versus leaving it as part of an estate.