CA COMMUNITY PROPERTIES FOR NONRESIDENT

[KATHERINE]

Hi dear friends,

I have another question again:  if NYS resident dies and jointly own real estate property in CA.   someone said can step up basis for the 100% value of the house to FMV instead of half.  Is that true?

Thank you!

 

Kate

[BulldogTom]

I don't think so.   But it is possible.   

Domicile at the time of purchase is the controlling factor (at least that is how I understand it).  If your couple were both domiciled in CA at the time they made the purchase of the property, then the property would be community property and carry that designation even if they subsequently moved to a separate property state.   If they were domiciled in NY (not a community property state) when the purchase was made, then the step up would only be for the half of the property owned by the decedent spouse and the living spouse would continue with their own basis.

Double check this because I am commenting from memory and not research.

Tom
Longview, TX

[Lion EA]

I think it can get into how the property was held, also. But, I can't give you any details about the different ways a couple can title property might or might not make it community property in CA. You might need to talk with the family's lawyer about that specific legal title.

[KATHERINE]

1 hour ago, BulldogTom said:

I don't think so.   But it is possible.   

Domicile at the time of purchase is the controlling factor (at least that is how I understand it).  If your couple were both domiciled in CA at the time they made the purchase of the property, then the property would be community property and carry that designation even if they subsequently moved to a separate property state.   If they were domiciled in NY (not a community property state) when the purchase was made, then the step up would only be for the half of the property owned by the decedent spouse and the living spouse would continue with their own basis.

Double check this because I am commenting from memory and not research.

Tom
Longview, TX

Hi Tom,

 They never lived in CA.  So, I will take it as normally we do because she is still alive and only his half transferred to his estate.

 

Thank you so much!

 

Kate

[KATHERINE]

1 hour ago, Lion EA said:

I think it can get into how the property was held, also. But, I can't give you any details about the different ways a couple can title property might or might not make it community property in CA. You might need to talk with the family's lawyer about that specific legal title.

yes, Lion.  I did some research for this situation.  If they were living in CA, and then moved to a common state, they should redesign the structure to make sure it will remain as community property.  It is so complicated to me.

 

Thank you!

Kate

[Max W]

CPWROS (Community Property With Right Of Survivorship) is what is required in CA for for full stepped up basis.

Prior to 2001, it was Joint Tenancy WROS.

[BulldogTom]

17 hours ago, Max W said:

CPWROS (Community Property With Right Of Survivorship) is what is required in CA for for full stepped up basis.

Prior to 2001, it was Joint Tenancy WROS.

Max makes an important point.   Even if they were Domiciled in CA, they needed to title the property purchase properly.   I just assumed that everyone who is domiciled in CA would title their joint property as CPWROS.

Tom
Longview, TX