step up in basis

[gman]

Taxpayer and wife operate a farm. Sch f in taxpayers name. Spouse dies. Would
livestock and all associated items with farming recieve a step up in basis? Community
property state.

[Unregistered]

Step Up

Believe your are correct because CP.

[Unregistered]

Stepped Up Basis

This has always been a bit confusing. How is the stepped up amount listed on the depreciastion schedule. As separate items?

[Maribeth]

In a community property state, the total assets in the marital community get a step up in basis as of the date of the spouse's death.

If items were depreciable, on the depreciation schedule, the assets are listed at the original basis and depreciation taken through the date of death. Then the assets are revalued and "placed in service" as of the date of death, and depreciation starts anew.

So for the year of death, you have a larger depreciation schedule then in the subsequent year when the original basis assets are deleted.

Maribeth

[Unregistered]

In a community property state, the total assets in the marital community get a step up in basis as of the date of the spouse's death.

And don't make assumptions as to the above. In most cases if the assets did not go through probate, but were held joint with right of survivorship, then they were not community property. In which case the step up or down in basis only applies to the decedent's half.

[dsi]

Then the assets are revalued and "placed in service" as of the date of death, and depreciation starts anew.

Do the "revalued assets" start depreciation all over again? i.e., a residential rental would start the 27.5 years all over?

[Unregistered]

Do the "revalued assets" start depreciation all over again? i.e., a residential rental would start the 27.5 years all over?

Yes. (Filler because the board software thinks my message is to short)