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Tax.appeal.168, Tax Accountant
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Experience:  3+ decades of varied tax industry exp. Tax Biz owner
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If I leave my house to my partner, we are unmarried, will Prop

Customer Question

If I leave my house to my partner, we are unmarried, will Prop 13 be reajusted to current market value
Submitted: 2 years ago.
Category: Tax
Expert:  Tax.appeal.168 replied 2 years ago.
Welcome. Thank you for choosing us to assist you. My name is ***** ***** my goal is to help make your life, a little... less taxing.
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To answer your question, what you're describing is what is referred to as Stepped Up Basis which moreso relates to capital gains. This does not apply to Prop 13. As for Prop 13, the following applies;
The following are examples of situations in which the transfer will not result in a “change in ownership” and thereby avoid the dreaded re-assessment for property tax purposes.
1. Transfers in which proportional ownership interests remain the same before and after transfer
For example, Husband and Wife own a rental home in joint tenancy (50/50 split) and transfer it to a limited liability company in which they have same membership interest (50/50 split). Rev & T C §62(a).
2. Transfers to revocable trusts
For example, Husband and Wife execute a revocable (living) trust and transfer the home they live in into the trust by transferring title from themselves to the trust by naming the trustee of their revocable trust as owner. Rev & T C §62(d).
3. Interspousal transfers
For example, Husband and Wife own their home in joint tenancy, Husband dies and Wife inherits the other half of the house. Rev & T C §63.
4. Parent-child (or grandparent-grandchild) transfer
For example, in the case of a Parent-Child transfer, Husband and Wife own a home and have one child, Son. Husband and Wife pass away and Son inherits the home. Furthermore, in the case of a Grandparent-Grandchild transfer, Grandparent is only survived by a Grandchild, that is no child of the Grandparent outlives the Grandparent. Rev & T C §62.
5. Persons over age 55 or who are severely and permanently disabled may transfer the base-year value of a residence to a replacement dwelling in the same county, or in another county if the board of supervisors of that county adopts an ordinance granting base-year-value relief to replacement dwellings when the original dwelling was located in another county.
Let me know if you require further assistance with this matter.