How to Use the Inherited Home Stepped-Up Basis Calculator
Korea's co-residence inheritance deduction rewards an adult child who lived with and cared for a parent in the same home for 10+ years by letting them inherit that home tax-free up to 600 million won. The US has no equivalent deduction — there's no tax break tied to how long you lived with a parent before inheriting their house.
Instead, the US relies on two very different mechanisms that make estate and inheritance taxation of a family home a non-issue for most people. First, the federal estate tax exemption is so high (roughly $15 million per person as of 2026) that the vast majority of inherited homes never trigger estate tax in the first place. Second, and more universally useful, is the stepped-up basis rule: when you inherit property, your cost basis resets to its fair market value on the date of death — erasing decades of unrealized capital gains for capital-gains-tax purposes, whether or not you ever lived with the person who left it to you.
This calculator illustrates that second benefit. Enter the home's original purchase price and its fair market value when you inherited it to see the capital gain — and the capital gains tax — you effectively avoid thanks to stepped-up basis. This is not a 1:1 substitute for Korea's deduction, but it's the closest real, computable US tax benefit tied to inheriting a home you lived in.
Frequently Asked Questions
No. There is no US deduction for having lived with a parent for 10+ years before inheriting their home. The closest real benefit is the stepped-up basis rule, which is a different mechanism entirely — it eliminates capital gains, not estate tax.
When you inherit property, your cost basis for future capital gains purposes resets to the property's fair market value on the date of death, rather than what the original owner paid. This can erase decades of unrealized capital gains.