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Texas has no inheritance tax, so most people inherit a house and hear nothing about tax at all. The bill, if it comes, comes later — when the house sells. What it costs depends on a single number, as of a single day, that nobody asks you for at the time. This is what that number is, why the Texas version of it is better than most people realise, and why it is not too late if the funeral was three years ago.
Published 27 October 2026
Here is the sequence almost everybody goes through.
Somebody dies. There is a funeral, and a will or no will, and a lawyer or no lawyer. The house sits for a while. Eventually it is sold, or somebody moves into it, or it is divided between three siblings who each want something different. At no point in any of that does a person in an official capacity say: write down what this house is worth today, and keep the paperwork.
Then, somewhere between one and ten years later, the house sells and an accountant asks what the basis is. And the honest answer is that nobody knows, because nobody was told it would matter.
Texas does not have an inheritance tax, and it does not have a state estate tax. Inheriting a house here does not produce a state tax bill.
Federal estate tax exists, but the exemption is now very high. For people dying in 2026 the basic exclusion amount is $15,000,000 — up from $13,990,000 for 2025. A married couple can shelter twice that with the right elections. The overwhelming majority of estates owe nothing and file nothing.
So the first conversation usually ends there: no tax, nothing to do.
That is the trap. Because the high exemption does not mean no tax ever arrives. It means no tax arrives now, and it means that in most estates no return gets filed on which the value of the house is ever written down. The number simply never gets created.
It is then needed, with interest, the day the house sells.
When you inherit property, your basis in it is not what the deceased paid. It resets. Internal Revenue Code section 1014 sets your basis as the fair market value of the property at the date of the decedent’s death
.
That is a genuinely generous rule, and it is worth being precise about how generous. Everything the house gained in value during the deceased’s lifetime is wiped off the board. You are taxed only on what happens after.
Here is the arithmetic on a house of entirely ordinary size for this area.
| Basis documented | Basis not documented | |
|---|---|---|
| What your mother paid for it in 1994 | $78,000 | $78,000 |
| Value on the day she died | $395,000 — appraised | Unknown |
| What it sold for two years later | $428,000 | $428,000 |
| Taxable gain | $33,000 | Whatever you can prove — and the burden of proving it is yours |
| Federal tax at 15% | about $4,950 | On $350,000 of gain, about $52,500 |
Illustrative arithmetic, not a measurement and not tax advice. Rates and brackets vary with income and the figures are rounded.
The gap between those two columns is not a tax loophole. Both columns describe the same house and the same law. The difference is entirely whether somebody established the value when it could still be established cleanly.
And notice what the right-hand column actually says. It does not say you owe tax on the full gain. It says you are in an argument, holding no evidence, about a fact from several years ago — and that the burden of substantiating basis sits with the taxpayer, not with the government.
This is the part that most surprises people, and I have had more than one client whose out-of-state accountant did not raise it.
In most states, when one spouse dies, half the house gets a new basis — the deceased spouse’s half. The survivor keeps their original basis on their own half. Half the gain stays taxable.
Texas is a community property state, and section 1014(b)(6) treats the surviving spouse’s own half as if it had been acquired from the decedent too, where at least one-half of the whole community interest was includible in the deceased spouse’s gross estate. Both halves reset. Practitioners call it the double step-up.
On the house in the table above — bought for $78,000, worth $395,000 at death — a surviving spouse in a separate-property state would carry roughly $158,500 of built-in gain on their own half into any future sale. In Texas, on community property, that half resets too, and the gain is measured from the date-of-death value instead. None of which happens if nobody recorded the date-of-death value.
Two honest qualifications, because this is the point at which people get excited and stop listening.
It is not automatic. Whether a particular house qualifies turns on how it was held — community property, separate property, property brought into the marriage, property inherited by one spouse during it, and what any agreement between them said. That is a question for your attorney or CPA, and it is a real question, not a formality.
It is also one-shot and date-specific. The adjustment happens at the first death, as of that date. A survivor who sells fifteen years later and never established the value at the first death has the same evidentiary problem as everybody else, only with more years of records gone.
No. This is the question I most wish people asked earlier, and the answer is better than almost everybody assumes, so I want to be unambiguous about it.
An appraisal with a past effective date is called a retrospective appraisal. It is ordinary professional work, not a workaround. The law fixes the date being valued, not the date you get round to establishing it. Section 1014 says your basis is the value at the date of death. It says nothing whatever about when somebody has to work that value out.
There are two clocks in this area, and both of them live inside the federal estate tax return — a return that, at a $15,000,000 exemption, the overwhelming majority of estates never file.
increased the liability for the tax. No estate tax liability, no cap — which means you are not locked to a figure somebody else filed. You are establishing the value for the first time.
Texas probate has its own deadline — the inventory is due before the 91st day after the representative qualifies — but that is a filing deadline for the estate, not a statute of limitations on finding out what a house was worth.
Evidence, and only evidence.
The comparable sales are not the problem. Sales that closed in 2021 are still in the records and still verifiable; the analysis runs backwards using data available as of the effective date, and that part is mechanical. What gets harder is establishing the condition of the house on that day — before the roof was replaced, before the kitchen was redone, before somebody cleared it out.
So the things worth digging out before you call anybody are the things that fix the house in time:
This is one of the most common calls I take, and it is routine work. The property no longer being yours does not prevent a value being developed as of the earlier date; it changes the evidence available, which is what the documentation above is for. If you sold it and your accountant has now asked what the basis was, that is a normal reason to call and not a lost cause.
The practical summary: waiting makes the work harder and occasionally makes it more expensive. It does not make it impossible, and it is not a door that closes. The full mechanics are on the date of death appraisal page.
The standard is not loose. For estate purposes, fair market value is the price at which property would change hands between a willing buyer and a willing seller
, neither being under any compulsion to buy or to sell
, both reasonably informed. The regulation adds that value is not to be determined by a forced sale price
, and is not set by a sale in a market other than the one the item is commonly sold in.
Three substitutes people reach for, none of which meet it:
It is not the county’s value. An appraisal district’s assessed value is produced by mass appraisal for taxation, as of 1 January, under its own statutory rules. It is not an opinion of market value on the day somebody died, and it is not developed to be defended as one. The wider version of that point is in the tax number on the listing is not your tax bill.
It is not what it later sold for. A sale eighteen months after a death is evidence of what the market was doing eighteen months after the death. If the market moved, and between 2021 and 2024 the market around Fort Worth moved considerably, that figure is not the date-of-death value — sometimes to your detriment, sometimes to your benefit.
It is not a figure from a website. Automated estimates are current-value models. They are not retrospective, not developed to the fair market value standard, and nobody signs them.
I wanted to know how often this situation actually arises around Fort Worth and what kind of house it lands on, so I measured it.
Across eight North Texas counties the MLS records 813 single-family listings flagged as probate listings, of which 623 closed. That is a floor rather than a census — the flag is optional, and a great deal of inherited property is sold without it or never listed at all. Here is how those sales compare with ordinary resale.
| Probate-listed sales | Ordinary resale | |
|---|---|---|
| Closed sales measured | 623 | 104,161 |
| Median year built | 1985 | 2001 |
| Median age of the house at sale | 41 years | 25 years |
| Built before 1980 | 40.6% | 23.1% |
| Median close price | $309,000 | $382,000 |
| Median days on market | 24 | 30 |
| Listing failure rate | 16.6% | 35.0% |
The age is the finding. The middle probate sale is a house 41 years old, against 25 for the market at large, and four in ten were built before 1980. That is not a curiosity. It is the mechanism: these are houses somebody bought a long time ago and kept. Long ownership is precisely what produces a large untaxed gain sitting behind the property — and therefore precisely what makes the date-of-death value worth establishing.
The two bottom rows are the uncomfortable ones. Probate-listed houses sell faster than ordinary resale and fail far less often — 24 days against 30, and a 16.6% failure rate against 35.0%. Estates are not generally struggling to sell. They are selling briskly.
Which means the window in which somebody might have stopped and established the date-of-death value is frequently over before anyone thinks of it. The house is gone, the proceeds are split, and the basis question surfaces at the following spring’s tax return with the evidence already a year colder.
Measured from NTREIS records of resolved single-family listings across Tarrant, Denton, Johnson, Parker, Hood, Ellis, Wise and Erath counties. Bank-owned, short sale, auction and new-construction listings are excluded from the comparison so that it is probate against ordinary resale rather than probate against the whole market. Aggregate figures only.
Here is the part that catches executors out, and it has nothing to do with the IRS.
If you are administering an estate through the Texas courts, you must prepare and file an inventory, appraisement and list of claims before the 91st day after you qualify as personal representative, unless the court extends it. That inventory has to set out the fair market value on the date of the decedent’s death of each item
.
So the number is required of you in the first three months, by name, by the state, regardless of whether any tax is owed anywhere.
And the shortcut does not remove it. An independent executor with no unpaid debts beyond secured debts, taxes and administration expenses can file an affidavit in lieu of inventory rather than filing the inventory with the court. But the affidavit works by certifying that the beneficiaries have received a verified, full and detailed inventory and appraisement. The inventory still has to exist and still has to be given to them. What changes is who sees it, not whether it is prepared.
The useful consequence: if you are an executor inside that 91-day window, you are being asked for exactly the figure you will want years later for the basis. Doing it once, properly, serves both.
A retrospective date-of-death appraisal from me starts at $600 for a standard home and $850 for a complex, luxury or acreage property, quoted as a fixed fee in writing before I start. It is never a percentage of the value and never varies with the figure I reach — which is the condition that makes it usable by a court, a CPA or the IRS in the first place.
Set that against the right-hand column of the table near the top of this page. I am not going to tell you the appraisal saves you a specific amount, because that depends on facts about your family that I do not have. What I can tell you is that it is the cheapest item in the entire transaction, and the only one that gets harder to buy as time passes.
If you are not sure whether you need one, the question to put to your CPA is narrow and they will answer it in a sentence: what basis are we using for this property, and what are we relying on for it? If the answer involves the words “the county” or “we’ll estimate,” that is your answer.
I am an appraiser. I establish what a property was worth on a stated date and I document how I got there. What that figure does to anybody’s tax return is work for a CPA or a tax attorney, and this page is not tax advice.
Specifically, three things I am not in a position to tell you:
Whether the double step-up applies to your house. It depends on how title was held and on facts I do not assess. I have set out what the provision says; whether your property is inside it is a question for your attorney or CPA, and it is worth asking plainly rather than assuming.
What you will owe. That depends on your income, your filing status, how long the property was held after the death, whether anybody lived in it, and what was spent on it since. None of those are appraisal questions.
Whether you need probate at all. Texas has several routes, some of which avoid administration entirely, and which one fits is a legal question. A number of my calls come from people who do not need an executor but do still need a value, which is a perfectly normal position to be in.
What I can do is give you the number, as of the right date, developed to the fair market value standard and written so that somebody who was not there can follow the reasoning years afterwards. That is the whole job.
Estate · retrospective and current value
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Not on the inheritance itself. Texas has no inheritance tax and no state estate tax, and federal estate tax applies only above the basic exclusion amount, which is $15,000,000 for people dying in 2026. What can arrive later is capital gains tax, when the house is sold. That is calculated from the value of the property on the date of death, which becomes your basis — so the tax outcome depends on a figure that in most estates nobody is ever formally asked to produce.
Yes. An appraisal with a past effective date is called a retrospective appraisal and it is ordinary professional work. The law fixes the date being valued, not the date somebody works it out — the basis rule says your basis is the value at the date of death and says nothing about when that value has to be established. The two deadlines people have heard of, the alternate valuation election and the consistent-basis rule, both live inside the federal estate tax return, which the great majority of estates never file. What genuinely gets harder with time is evidence of the property’s condition on that date, so photographs, old listings, inspection reports, permits and prior appraisals all help.
Yes, and it is one of the most common reasons people call. No longer owning the property does not prevent a value being developed as of the earlier date; it changes what evidence is available. Photographs, the listing used to sell it, any inspection report, and records of work done before or after the death all go to establishing the condition as of the effective date. If your accountant has asked what basis you used and you do not have an answer, that is a normal and fixable position.
Generally the fair market value of the property on the date the person died — the basis resets, so what they originally paid stops mattering. If the executor filed a federal estate tax return and elected alternate valuation, it is the value six months after death instead. In Texas, if you are a surviving spouse and the property was community property, both halves may take the adjustment rather than only the deceased spouse’s half. The figure has to be established and documented; it does not arrive automatically on a form.
Potentially, and this is a real advantage of a community property state that people routinely miss. Section 1014(b)(6) treats the surviving spouse’s own one-half share of community property as having been acquired from the decedent, where at least half the whole community interest was includible in the deceased spouse’s gross estate — so both halves take a new basis rather than only one. It is not automatic. Whether it applies depends on how the property was held, which is a question for your attorney or CPA rather than for an appraiser.
It is a poor substitute and it is not what the standard asks for. An appraisal district value is produced by mass appraisal for taxation purposes, as of 1 January, under its own statutory rules. The estate standard is fair market value — the price at which the property would change hands between a willing buyer and a willing seller, neither under compulsion, both reasonably informed, and expressly not a forced sale price — on the specific date of death. Those are different questions answered by different processes, and only one of them is developed to be defended.
Yes, and sooner than most executors expect. The personal representative must prepare and file an inventory, appraisement and list of claims before the 91st day after qualifying, unless the court grants more time, and it must state the fair market value on the date of the decedent’s death of each item. An independent executor with no unpaid debts beyond secured debts, taxes and administration expenses may file an affidavit in lieu of filing the inventory with the court — but that affidavit certifies that the beneficiaries received a full inventory and appraisement, so the inventory still has to be prepared.
Mine starts at $600 for a standard single-family home and $850 for a complex, luxury or acreage property, quoted as a fixed fee in writing before I begin. The fee is based on the property, how far back the effective date sits and how much documentation of the earlier condition exists. It is never a percentage of value and never varies with the conclusion reached, which is the condition that makes the report usable by a court, an appraisal review board or the IRS.
This page explains how inherited property is valued and why the date matters. It is general information, not legal or tax advice, not an opinion of value, and nothing here is an appraisal. Whether any particular provision applies to your property is a question for your attorney or CPA.
Send me the address and the date of death — that is all I need to quote it. From $600 for a standard home, fixed and in writing before I start, never a percentage of the value. If the house has already sold, say so; it is routine.
Would you rather not type it out? Call or text (817) 903-4509.