How Much Capital Gains Tax Does a 61-Year-Old Owe on $750,000 of Inherited Apple Stock?

A 61-year-old married retiree opens the final statement from her late parent’s brokerage account and finds one large position: Apple (NASDAQ:AAPL | AAPL Price Prediction), worth at $750,000 when her parent died. Apple has gained nearly 1,300% over the past 10 years, so she assumes a sale would hand the IRS a big share of it.

Selling at the value set when her parent died means she owes $0 in federal capital gains tax. The tax code wipes out the gains the parent built up the moment the shares pass to her.

Step-Up in Basis Erases Decades of Growth

Under 26 U.S.C. § 1014(a)(1), the basis of inherited property is “the fair market value of the property at the date of the decedent’s death.” The executor can choose an alternate valuation date under Section 2032. The final estate tax value on that schedule sets her basis when a Form 706 was filed and the heir gets Schedule A (Form 8971).

The holding period works in her favor too. IRS Publication 544 states that heirs are “considered to have held the property longer than 1 year, regardless of how long you actually held it.” That means every gain on inherited stock is long-term, taxed at the 0%, 15% or 20% rates under 26 U.S.C. § 1(h). The rest of her income still faces ordinary rates that top out at 37% for tax year 2026.

There is one exception. Under Section 1014(e), appreciated property gifted to the deceased person within 1 year of death that goes back to the donor keeps the decedent’s old basis.

Running the Numbers on $750,000 of Apple

At Apple’s price of $348.55 on Nov. 10, 2026, $750,000 is about 2,151 shares. These figures assume a joint return for tax year 2026, federal tax only.

Lifetime Gift Would Have Cost Six Figures

If the parent had given the shares away while alive, 26 U.S.C. § 1015(a) would carry over the donor’s basis. The holding period carries over as well: it “is considered to have started on the same day the donor’s holding period started.”

To show the size of the gap, take a hypothetical position bought ten years ago at Apple’s split-adjusted price of $24.92. The real basis depends on actual purchase records. In this example, the basis is about $53,622, leaving $696,378 of gain. At 15%, the tax is about $104,457. A gain that large pushes much of the income into the 20% bracket. It also triggers the 3.8% Net Investment Income Tax once modified AGI goes $250,000 on a joint return (26 U.S.C. § 1411(b)(1)). That raises the bill toward $165,738.

Three Paths and the Tax on Each

Sell soon after inheriting. Only the price change between her parent’s passing and the sale is taxable. A drop in price creates a deductible capital loss.

Hold. Apple reported fiscal 2026 revenue of $478.83 billion and GAAP EPS of $8.98. The stock trades at about 39 times earnings. Every dollar above $750,000 becomes long-term gain when she sells. A 10% rise creates a $75,000 gain, which costs $11,250 at 15%, or $14,100 if the 3.8% surtax also applies. The $0.27 quarterly dividend is taxed separately every year. A drop in Apple’s price reduces her inheritance directly.

Diversify gradually. She sells blocks of shares across tax years 2026, 2027 and later. Each block is taxed only on its own gain since she inherited the shares, and spreading sales out keeps more of the gain in lower brackets and below the surtax threshold. The trade-off is staying concentrated in one stock while she sells down.

Estate tax is irrelevant at this size. The basic exclusion for 2026 deaths is $15,000,000. State income tax on any later wins is a separate question.

4 Moves Before Selling a Single Share

1. Get the valuation as of her parent’s passing from the executor, and ask whether a Form 706 or Schedule A (Form 8971) exists.
2. Confirm the custodian recorded the stepped-up basis on the re-registered shares. A wrong basis on Form 1099-B means paying tax on gains that legally disappeared.
3. Ask whether the executor choose alternate valuation under Section 2032, because that date resets her basis.
4. Before each sale, compare estimated modified AGI for the tax year with the $250,000 surtax threshold.

She can check with a CPA on how the sale will be taxed in her state. The bigger lesson sits before of that conversation: a stepped-up basis only works if the paperwork on the decedent’s side was in order (we put the full estate checklist, beneficiary forms and titling included, in a free guide: Die With a Plan).

Number That Matters Most

Sold at the value set when her parent died, $750,000 of inherited Apple stock has $0 of federal capital gains tax. In this example, the step-up erased $696,378 of gain that a lifetime gift would have left her to pay tax on.

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