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There would be no estate tax consequence because upon the death of one spouse, because CA is a community property state, the basis of the property will be adjusted to its fair market value at the date of death so if the property is then subsequently sold at that fair market value, there would be no gain on the sale. If this is going to be a principal residence, then if sold during life, there is a $250,000 exclusion from gain if owned as sole and separate property; but a $500,000 exclusion from gain if owned by spouses. The right of survivorship does not impact the tax issue; rather, it simply means upon the death of the first spouse, title vests automatically in the surviving spouse and you avoid the need for probate.
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