Taxpayer and his spouse owned a few residential rental real estates for many years. Two years ago, husband passed away and wife filed a Form 706 for him. Then all her properties stepped up to FMV according to the rule of community property or joint tenancy for either 100% or 50% step-up at a date of death from the taxpayer. I have two related questions to ask and appreciate someone could help, thank you very much!
1. From the date of death of taxpayer, we need to start using a new step-up basis and a brand new depreciation period (e.g. 30 years) to depreciate the same old properties again. Is that true?
2. Can she just leave a memo entry on the depreciation schedule for each of her rental properties to disclose how much was the stepped-up amount and keep using the old depreciation schedule after DOD since the surviving spouse is near 70, and she is not interested to get more depreciation write-off and pay more capital gain tax later.