grandmabee Posted April 10, 2009 Report Share Posted April 10, 2009 Question. When a couple owns a home and husband dies in a community property state (CA) does she get stepped basis on the entire assest or just half. I have one that she moved and could not sell and now she is out of the home deduction time limit for sec 121 Quote Link to comment Share on other sites More sharing options...
JRS Posted April 10, 2009 Report Share Posted April 10, 2009 It depends on the deed. If it is John and Mary Doe, she gets the 1/2 step up basis. There is another way of titling the deed where the surviving spouse gets a full step up in basis. The only problem is I can't remember how it needs to be titled and my title is in a safe deposit box. I believe, and am probably wrong, it needs to say joint tenancy. Quote Link to comment Share on other sites More sharing options...
BulldogTom Posted April 10, 2009 Report Share Posted April 10, 2009 I think they get the step up regardless of how the deed is written. Tom Lodi, CA Quote Link to comment Share on other sites More sharing options...
JRS Posted April 10, 2009 Report Share Posted April 10, 2009 Community Property: In California, married couples may own property as "community property with rights of survivorship" which is essentially the same as joint tenancy, except that the entire property receives a basis step-up upon the death of one spouse. In this case, a later sale by the spouse of $1.0 million would not cause a taxable gain. I have no cite for this, but I read somewhere the IRS will only honor the full step up, if the property is titled as above. If just Mr & Mrs, 1/2 step up. I think it was on the Tax Almanac Board a couple of years ago. Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.