Does this go 1040 or 1041

[DMICPA]

Married couple. Home is Community property as they live in CA and the title is such.

Husband dies 9/1/13. They can file joint for 2013.

Wife pays property taxes on this home in October 2013.

Husband estate is in probate as not everything is going to wife and husband had other property in His sole name and is not Community Property.

Since home passed to wife as Community property set aside was done, I would think she can deduct the taxes on the 1040 for this home only.

It cannot go into the probate estate as the title is such that this is Community Property and it passed to her.

Does this line of thinking sound reasonable?

[appelman]

Is it community property with right of survivorship?

If not, I'm not at all sure that it stays out of probate.

[Burke]

It is my understanding that there is no "joint tenants with right of survivorship" in community property states. It is considered "joint tenants," unless the property has the correct wording in the deed that it is purchased/taken as community property. If this is done, it passes automatically outside of probate to the surviving spouse (if that is whose name is on the title). So if that is the case, then ownership passed to her at his death, and she can deduct the property taxes paid.

[Maribeth]

Yes, she can deduct the property taxes. The house passed to her at its stepped-up value on the day her husband passed away.

Any other property held in both of their names also passed directly to her.

[appelman]

Not quite.

It is my understanding that there is no "joint tenants with right of survivorship" in community property states. It is considered "joint tenants," unless the property has the correct wording in the deed that it is purchased/taken as community property. If this is done, it passes automatically outside of probate to the surviving spouse (if that is whose name is on the title). So if that is the case, then ownership passed to her at his death, and she can deduct the property taxes paid.

Since 2001 California has had "community property with right of survivorship." I don't know about other CP states.

[DMICPA]

thank you

Yes, this was in Community property with right of survivorship. I checked the attorney's records and there is no probate on this as it is hers just as much as his.

I don't know what I was thinking. When a California married resident passes away the spouse still files a joint return and of course the property taxes get a deduction in most situations. When my father passed away, I did the return for my mom and of course I deducted the property as there was no probate. An attorney did a Community Property set aside which is a transfer to the surviving spouse. Was not a big deal.

Actually, many years ago, a lot of the homes in CA were titled as Joint Tenants. However there was something apparently that came out and the surviving spouse still got a full step up because a term was used that it was "Joint Tenant for Convenience". Where I worked at a CPA firm in the 1970s, the clients received a full step up and later when I went to another CPA firm they did it the same way. Never was challenged by any tax authorities and this was checked as the estates were large.

[TXEA]

Texas has allowed JTWROS since 1987. Community property does receive a full step-up at death as well. If this was held a JTWROS then the deduction on the 1040 is allowed for the wife as it passed by operation of law on the date of his death.