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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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My aunt and uncle purchased a condo, joint tendancy in 1975

Resolved Question:

My aunt and uncle purchased a condo, joint tendancy in 1975 for $31,000. My uncle died in l991 and my aunt transfered the the title to her Trust dated l991 in her name. Does the cost basis now become the Fair Market Value in l991 or remain the original purchase price in 1975?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello Dmar,

What state did your aunt and uncle live in when your uncle died?

Customer: replied 7 years ago.
Expert:  Merlo replied 7 years ago.
Hello again Dmar,

Since California is a community property state, when your uncle died that means that your aunt received a full stepped up basis in the property. Her new basis became whatever the fair market value was of the condo at the time your uncle passed away. Her basis does not revert back to the original purchase price.

In states other than community property states, the spouse receives a 50% stepped up basis, but if they were residents of California, then she receives a full stepped up basis in the property.

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Thank you.



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