Skip to main content
Kansas Step-Up in Basis
Support GuideKansas26 min read

Kansas Step-Up in Basis

Kansas step-up in basis: inherited property resets to date-of-death value under IRC 1014, Kansas taxes no inheritance, and only a sale is taxed.

By Settled Editorial

Inherited property in Kansas takes a new cost basis equal to its fair market value on the day the owner died. That rule is federal, at Internal Revenue Code Section 1014(a), and it erases the capital gains tax on everything the asset gained during the owner's lifetime. Kansas charges no estate tax and no inheritance tax, so the only tax an heir meets here is income tax on gain, and only on a sale.

Kansas writes no basis rule of its own. What Kansas adds is the paperwork and the title question: a 30-day inventory that states the value "as of the date of death," an independent appraisal that happens only when an interested party asks for one, a default that turns two names on a deed into a tenancy in common, and a community property trust act signed in April 2026 that can change how much of a married couple's property resets.

What the Step-Up Does, and Where the Rule Comes From

Basis is what the tax system treats as your cost in an asset. On a sale you pay capital gains tax on the price minus that basis. The step-up changes the starting number, and on an appreciated house that is the whole ballgame.

The problem it solves

Take a case. Your father bought a house in Wichita in 2003 for $88,000. At his death in 2026 it is worth $265,000. Had he deeded it to you during his life, you would take his $88,000 cost, called a carryover basis, and a sale at $265,000 would show a $177,000 gain.

Because you inherited it instead, your basis steps up to $265,000. Sell at $265,000 and the gain is zero. Sell two years later at $291,000 and you report $26,000 rather than $203,000. Those figures show the mechanism and are not a computation of anyone's tax.

The rule is federal, and it runs both ways

Internal Revenue Code Section 1014(a) gives property acquired from a decedent a basis equal to "the fair market value of the property at the date of the decedent's death," with three alternatives: the Section 2032 alternate valuation figure, the Section 2032A special-use figure for farm and closely held business real property, and the decedent's own basis to the extent of a Section 2031(c) conservation easement exclusion. Kansas farm ground is one of the few places where that second alternative gets used.

The adjustment also runs down. An asset worth less at death than the owner paid resets to the lower figure, and the paper loss the owner could have claimed disappears with them. Holding a depreciated asset until death throws away a deduction a lifetime sale would have captured.

Do you need probate in Kansas?

Answer a few questions to see whether Kansas probate is required and which process applies.

Take the 2-minute assessment

Kansas Charges No Estate Tax and No Inheritance Tax

Heirs mix these up constantly, so take them apart.

  • Nothing is charged for receiving an inheritance. Search the Kansas Office of Revisor of Statutes chapter 79 index, all 2,222 section catchlines, for the word "inheritance" and it returns zero rows. There is no Kansas inheritance tax, no return, and no waiver to chase.
  • Both estate tax acts are repealed. The 1998 act ran at K.S.A. 79-15,100 through 79-15,128 and was repealed by L. 2006, ch. 199, sec. 54, effective January 1, 2007. The 2006 replacement ran at K.S.A. 79-15,201 through 79-15,253 and was repealed effective January 1, 2010.
  • The two surviving sections close the door rather than open it. K.S.A. 79-15,146 says the 1998 act applies only to estates of decedents dying after June 30, 1998 and before January 1, 2007, and only where a return was filed before January 1, 2017. K.S.A. 79-15,254 does the same for the 2006 act: deaths after December 31, 2006 and before January 1, 2010, and only where a return was filed before January 1, 2020. Both cutoffs have passed.
  • One live section still says "estate tax" and is not a Kansas death tax. K.S.A. 79-15,126 is the Kansas estate tax apportionment act. Its own definition at subsection (a)(3) covers any estate, inheritance or death tax "imposed by federal, state, local or foreign law, including the federal estate tax." It divides a tax that some other government charges. It charges nothing.

Only the federal estate tax can apply to a Kansas estate, and it reaches a narrow band of them. Kansas itself levies neither an estate tax nor an inheritance tax, and the Kansas estate tax page sets out the repeal chain that gets you to that answer. Internal Revenue Code Section 2010(c)(3)(A) sets the exclusion amount at $15,000,000, indexed for inflation for a decedent dying in a calendar year after 2026, and a first spouse's unused amount can carry to the survivor if that first estate files a return and elects portability. Read whether any estate tax is owed as a separate question from this one. That page decides whether a transfer tax is due. This page decides what you pay when you sell.

Kansas Income Tax Starts With the Federal Number

This is the part that makes the federal rule land automatically on a Kansas return.

K.S.A. 79-32,117(a) says the Kansas adjusted gross income of an individual "means such individual's federal adjusted gross income for the taxable year, with the modifications specified in this section." The stepped-up basis has already been applied by the time the federal number arrives, so it carries into Kansas without a second calculation.

Read the modification list and one thing stands out. The whole section mentions "capital gain" exactly once, at subsection (c)(iii), and that subtraction exists only to reconcile property with a higher adjusted basis for Kansas purposes than for federal purposes. It is a repair for a mismatch. Kansas offers no capital gain deduction of its own, and no preferential rate for long-term gain. Gain from selling an inherited asset lands in the same schedule as wages under K.S.A. 79-32,110.

That count comes from current law, not from the published code, and the gap between the two is real here. The revisor's text runs only through the 2025 session, and the 2026 legislature amended K.S.A. 79-32,117 three separate times. Reading all three acts at the Secretary of State settles it. Chapter 154, approved April 27, 2026, is the reconciling act and the final 2026 version of the section, and the subtractions that session added cover health care sharing expenses and portable benefit plan contributions. Not one of them reaches capital gain. K.S.A. 79-32,110 moved in the same session, by chapter 155, and the rate schedule came through unchanged. Confirm the schedule for your filing year with the Kansas Department of Revenue rather than carrying a rate forward, because K.S.A. 79-32,110c can lower it by certification every August 15.

An out-of-state heir has one more question to answer. K.S.A. 79-32,109(h)(1)(A) treats income attributable to "the ownership of any interest in real or tangible personal property in this state" as modified Kansas source income for a nonresident. Selling a Kansas house or Kansas farm ground puts gain on the Kansas side of that line even when the heir lives in Colorado.

Advertisement

Kansas Writes the Date-of-Death Value Into the Inventory

The step-up is worth exactly as much as your proof of the number, and Kansas hands you a place to record it.

K.S.A. 59-1201 gives the personal representative 30 days after the date of the letters of appointment, unless the court grants longer, to make an inventory stating opposite each item "the full and fair value as of the date of death of the decedent," verified by the representative's affidavit. It covers Kansas real estate and tangible personal property plus intangible property wherever located, sorted into five classes: real estate with a plat or survey description, furniture and household goods and wearing apparel, corporation stocks described by certificate number, bonds and mortgages and notes described by debtor and recording data, and all other personal property accurately identified. A partnership interest gets a separate inventory of the whole partnership estate and the decedent's proportional share. The court may order an earlier inventory for good cause.

Two follow-on sections matter to an heir. K.S.A. 59-1203 requires a supplementary inventory for assets discovered later, filed with the court within 30 days of the discovery. K.S.A. 59-1207 lets the personal representative "employ one or more advisers to aid in valuing inventoried items," paid what the court deems reasonable. That is the statutory hook for hiring a real appraiser and having the estate carry the cost.

Nobody appraises anything unless somebody asks

K.S.A. 59-1202 opens with the sentence that decides how good your evidence will be: "No independent appraisement shall be made unless a party having an interest in the estate requests one."

Absent a request, the values on the inventory are the family's own numbers, sworn to but never tested. If a party with an interest does request one, the personal representative appoints up to three appraisers, approved by the court unless good cause is shown against them. They have 30 days to state a value opposite each item, certify the inventory and appraisement under oath, and deliver it to the personal representative, who files it with the district court. The court sets their compensation.

That request is the cheapest move available to an heir who expects to sell, and the window for it runs while the estate is open. The job itself is covered in Kansas executor duties, and the Kansas probate guide explains when a personal representative gets appointed at all.

What to gather, by asset

  • Real estate. A written appraisal as of the date of death. A county appraiser's valuation notice is an ad valorem figure produced for property tax and is the weakest paper you can put in the file.
  • Farm ground and mineral interests. Kansas estates hold both. Get a written valuation from someone who values that asset class for a living and name them on the inventory. Royalty payments that arrive after the death are income to whoever earned them and do not change the basis.
  • Listed stocks and bonds. The IRS Instructions for Form 706 give the rule: fair market value is the mean between the highest and lowest selling prices quoted on the valuation date, and where only closing prices exist, the mean of the closing price on the valuation date and on the trading day before. Most brokers produce a date-of-death valuation statement on request.
  • A business interest. A written valuation from a qualified appraiser. Partnership and limited liability company interests also raise a Section 754 election question inside the entity.
  • Higher-value personal property. Appraisals for art, firearms, jewelry, vehicles and collections. Photograph them where the person who died left them.

Put the date in writing when you engage anyone. Ask for an opinion of fair market value as of the date of death, and ask that the date appear on the face of the report.

Two Names on a Kansas Deed Do Not Make a Joint Tenancy

Kansas is stricter here than most people expect, and the deed decides the basis answer.

K.S.A. 58-501 says real or personal property granted or devised to two or more persons, "including a grant or devise to a husband and wife," creates a tenancy in common "unless the language used in such grant or devise makes it clear that a joint tenancy was intended to be created." The one exception runs the other way: a grant or devise to executors or trustees in that fiduciary capacity creates a joint tenancy unless the instrument expressly declares otherwise.

Three consequences follow.

  • No survivorship without the words. A married couple on a Kansas deed that says nothing about survivorship hold as tenants in common. Nothing passes automatically, and the decedent's half travels through the estate.
  • The granting clause wins. Where a deed grants joint tenancy in the granting clause and the habendum clause disagrees, K.S.A. 58-501 makes the granting clause control.
  • Proving the death is a recording job. When a joint tenant dies, certified letters testamentary or of administration, or a death certificate from the proper official, or an affidavit of death from a responsible person, is prima facie evidence of the death, and for real property it gets recorded with the register of deeds in the county where the land sits.

Pull the recorded deed before you assume how a Kansas property passed. Get that wrong and every later number is wrong with it.

How much actually steps up

Federal law decides that, and it splits by who the joint owners are.

  • A married couple who are the only two joint tenants. Internal Revenue Code Section 2040(b) calls that a qualified joint interest and includes one half of the value in the deceased spouse's gross estate whoever furnished the purchase money. One half steps up. The survivor's half keeps its original cost, and the survivor carries a mixed basis into any later sale.
  • Anyone else holding as joint tenants. Section 2040(a) applies the consideration-furnished rule. The gross estate includes the whole value except the part shown to have originally belonged to the other owner and never to have come from the decedent for less than adequate and full consideration. A child who contributed nothing to a house held jointly with a parent sees the full value included in the parent's estate, and the full value becomes the basis.

Kansas Is a Separate-Property State, and the 2026 Trust Act Is the Opt-In Exception

IRS Publication 551 names the nine community property states as Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Kansas is not on that list, so ordinary Kansas title produces the half step-up described above.

Kansas built a door around that in 2026, and almost nothing written for families mentions it yet.

2026 Kansas Session Laws chapter 98, House Bill 2590, enacted the Kansas community property trust act. It was approved April 9, 2026, and section 16 makes it effective from and after publication in the statute book, so it does not reach a death before then. The revisor has not yet assigned K.S.A. numbers to the act's new sections, which is why this page cites the session-law chapter.

New section 6 is the sentence that matters for basis: for purposes of 26 U.S.C. Section 1014(b)(6), a community property trust "is considered a trust established under the community property laws of Kansas."

Read that against the federal paragraph it points at. Section 1014(b)(6) treats "property which represents the surviving spouse's one-half share of community property held by the decedent and the surviving spouse under the community property laws of any State" as acquired from the decedent, so long as at least one half of the community interest was includible in the decedent's gross estate. The survivor's own half gets a new basis too. On ordinary Kansas title it would not.

The rest of the act sets the boundaries. New section 4(a) makes the vehicle available whether or not both spouses, one spouse or neither spouse is domiciled in Kansas. New section 7 makes one half of the trust the survivor's share, not subject to the decedent spouse's will or to the laws of succession, and keeps the decedent spouse's half out of the elective estate. New section 2 sets four formal requirements the trust has to meet, including a qualified trustee and an all-capitals warning paragraph printed in the document. Those requirements belong to the instrument, and the Kansas community property trust act covers them where the trust itself is explained.

Two things to hold onto. Kansas remains a separate-property state, and property becomes community property only by being transferred into a conforming trust. And this paragraph describes what the statute makes available, not what any couple should do. The act's own warning language tells signers to seek independent legal advice, which is the right instruction. Take it to a Kansas attorney and a CPA together, because the marital consequences and the tax consequences are two different conversations.

Advertisement

What Does Not Step Up

  • Tax-deferred retirement accounts. Internal Revenue Code Section 1014(c) says the section "shall not apply to property which constitutes a right to receive an item of income in respect of a decedent under section 691." A traditional IRA, a 401(k), unpaid deferred compensation and similar items keep their character, and the beneficiary pays ordinary income tax on withdrawals.
  • Property the owner gave away during life. A completed lifetime gift carries the donor's basis forward. That is the trade against the step-up, and it is the reason deeding a house to a child early so often costs the family more than probate would have.
  • Appreciated property gifted to the decedent within a year of death. Section 1014(e) blocks the round trip. Where appreciated property was given to the decedent within the one-year period ending on the date of death and comes back to the donor or the donor's spouse, the basis is the decedent's adjusted basis immediately before death.
  • Assets already outside the gross estate. Property in an irrevocable trust in which the decedent retained nothing takes no date-of-death basis, because nothing about the death brings it into the gross estate.

A Kansas transfer-on-death deed sits on the other side of that line. K.S.A. 59-3501(a) transfers ownership only "upon the death of the owner," subsection (b) makes the beneficiary's signature, consent and notice unnecessary during the owner's life, and K.S.A. 59-3503 lets the owner revoke or change the designation at any time before death. K.S.A. 59-3507 confirms the deed is not a testamentary disposition. The owner keeps everything until death, so the property sits in the gross estate and takes a date-of-death basis under Internal Revenue Code Section 1014(b)(9). Title vests in the grantee beneficiary at death under K.S.A. 59-3504(a), subject to every mortgage, lien and Kansas medical assistance claim the owner was already subject to. The recording mechanics are set out in the Kansas transfer-on-death deed guide.

Selling, and the Two Traps That Follow the Death

Basis only matters when something changes hands, and selling inherited property in Kansas covers the transaction itself. Three points belong here.

The holding period is automatic. Internal Revenue Code Section 1223(9) says a person whose basis in inherited property is determined under Section 1014 and who sells within one year of the death "shall be considered to have held such property for more than 1 year." Long-term treatment does not depend on how fast the family moves.

The home-sale exclusion usually does not reach an heir. Section 121 excludes gain only where the seller owned and used the property as a principal residence for periods aggregating two years within the five years ending on the sale. An heir who never lived in the house does not qualify. Most of the time it does not matter, because the basis reset already removed the gain the exclusion would have covered.

A family that never probated still needs a dated record. K.S.A. 59-2250 lets any person interested in the estate petition the district court to determine descent once the decedent has been dead more than six months, where no will was filed within six months, no petition for probate was filed, and no administration happened without a determination of descent. Under K.S.A. 59-2251 the court enters a decree assigning the property "to the persons entitled thereto at the time of the decedent's death." That decree clears title for the sale and puts a court-dated record of the transfer in the county file, which is worth having when a basis question surfaces years later.

The Alternate Valuation Date Almost Never Applies in Kansas

Internal Revenue Code Section 2032 lets an executor elect to value the gross estate six months after the death. Three restrictions keep it rare. Subsection (c) allows the election only where it decreases both the value of the gross estate and the estate tax due. Subsection (d)(1) requires the election on the estate tax return and makes it irrevocable. Subsection (d)(2) blocks it where the return is filed more than one year after its due date including extensions.

With no Kansas estate tax and a federal exclusion at $15,000,000, almost no Kansas estate files a federal return at all. No return means no election, which means the date of death is the valuation date.

Where a federal return is filed, Section 1014(f) ties the two numbers together. Basis cannot exceed the value finally determined for federal estate tax purposes, or the value reported on a Section 6035(a) statement. The figure on the return and the figure you claim on a later sale have to agree.

Frequently Asked Questions

Does Kansas tax me when I inherit property?

No. Kansas charges no inheritance tax and no estate tax. The chapter 79 index of 2,222 statute catchlines returns zero matches for the word inheritance, and both Kansas estate tax acts are repealed. The 1998 act at K.S.A. 79-15,100 through 79-15,128 was repealed effective January 1, 2007, and the 2006 act at K.S.A. 79-15,201 through 79-15,253 was repealed effective January 1, 2010. What can still reach an heir is Kansas income tax on gain, and only on a sale.

Where does the date-of-death value get written down in a Kansas estate?

In the inventory. K.S.A. 59-1201 gives the personal representative 30 days after the date of the letters of appointment to make an inventory stating opposite each item the full and fair value as of the date of death of the decedent, verified by affidavit and sorted into five classes. Kansas is one of the states that puts the valuation date in the statute itself, so the estate paperwork and the federal basis rule ask for the same number.

Who appraises the property in a Kansas estate?

Nobody, unless somebody asks. K.S.A. 59-1202 opens by saying no independent appraisement shall be made unless a party having an interest in the estate requests one. On request, the personal representative appoints up to three appraisers approved by the court, who have 30 days to value each item, certify it under oath, and hand it back for filing with the district court. An heir who expects to sell should make that request while the estate is open.

If my spouse and I own our Wichita home together, does the whole house step up when one of us dies?

Usually only half. Kansas is a common-law property state, and IRS Publication 551 names the nine community property states without Kansas among them. Where a married couple are the only two joint tenants, Internal Revenue Code Section 2040(b) puts one half of the value in the deceased spouse's gross estate whoever paid for it, so one half steps up and the survivor's half keeps its original cost. Read the deed first, because K.S.A. 58-501 creates a tenancy in common by default.

Does the Kansas community property trust act give a full step-up?

It is the mechanism that can. New section 6 of 2026 Kansas Session Laws chapter 98 provides that for purposes of 26 U.S.C. Section 1014(b)(6) a community property trust is considered a trust established under the community property laws of Kansas, and that federal paragraph is what reaches the survivor's half. The act was approved April 9, 2026 and does not reach an earlier death. Kansas is still a separate-property state, and property becomes community property only by going into a trust that meets the act's four requirements.

Do inherited retirement accounts get a step-up in Kansas?

No, and no Kansas rule changes that. A traditional IRA, a 401(k) and similar tax-deferred accounts are income in respect of a decedent. Internal Revenue Code Section 1014(c) says the basis rule does not apply to property that constitutes a right to receive an item of income in respect of a decedent under section 691, so a beneficiary pays ordinary income tax on withdrawals with no reset. The step-up reaches capital assets such as a house, farmland, a mineral interest or a taxable brokerage account.

Related Guides

This page describes Kansas and federal law broadly rather than advising on one estate. Basis outcomes turn on facts that change from family to family, so take your own dates, deeds and figures to a CPA or a tax attorney, and confirm anything procedural with the district court clerk in the county where the decedent lived.

Sources:

It is not legal advice.

Information current as of September 8, 2026

Settled Estate is not a law firm, and this content is for informational purposes only and does not constitute legal advice. Probate laws and procedures in Kansas can change. Consult with a qualified attorney for advice specific to your situation. Full disclaimer.

All Kansas guides← Back to all articles

More Kansas Resources

Explore the rest of the Kansas probate hub.

Do I need probate?5 pages
For the executor4 pages
Money and taxes4 pages
Family and inheritance5 pages
Transfer assets5 pages
File and learn5 pages