Following the death of the owner, stepped-up basis allows for forestland and timber to be valued at current market value, with that value being the new owner’s basis in them. The new owner will calculate any future capital gain using that stepped-up basis. Plus, no capital gains tax is due on the unrealized capital gain that would have resulted from the transfer. For example, if the original owner paid $500,000 for forestland in the past, and at the time of his or her death its value was $2,000,000, then the unrealized capital gain would have been $1,500,000, with the estate owing 20 percent of that, or $300,000 in taxes.