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Community Property Step-Up

January 20, 2017 • Anonymous • Log In to Post Comments

Spouses held their principal residence titled as joint tenants. It was purchased during the marriage with community property funds. There was no statement in their wills that the property is intended to be a community asset, as required by Rev Rel 87-98. One spouse died in 2016. Does the surviving spouse only get a stepped up basis on 1/2 of the property?


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The surviving sposue only gets 1/2 the tepped up basis.

Now  similar situation but home is a rental  property. Property has been a rental for five years and has take depreciation for five years approx $45,000. If property now Has new basis as of date of death,and a new basis is entered on the depreciation schedule with date of death as new date asset was placed I service, what happens to accumulated depreciation previously taken?

To the extent the basis is stepped up, you ignore the prior depreciation and just start depreciating using new basis and acquisition date is date of death.

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