stepped up basis

[gman]

This post relates to the sale of several rent houses I posted earlier. One spouse passed away about 2 years ago. Community property state. If surving spouse also recieves step up, how is recapture handled??

Thanks

[Roland Slugg]

Recapture when stepped-up basis

The potential for recapture started over when the basis of each property was stepped-up. Recapture only applies to depreciation allowed or allowable subsequent to the step-up in basis.

"Recapture" is a misnomer, and I assume you are referring to the possible Sec §1250 gain.

[Chief]

Stepped Up Basis

Last year I had a client whose wife had died and he sold Their apartment in Hawaii. After extensive research I did as Roland suggested.

Roland, I assume youre going to national NATP conference in Las Vegas, Nevada in July. Or because its so close you're not. My wife and I plan to take in our first NATP conference in July. Wouldn't it be nice if TaxBook hosted a meeting for those of us on the Board to get together and meet. I'm too tight to gamble but plan to look at people losing money.

[gman]

basis

so when one the one spouse died, all the rental properties they owned(jointly)would get
a stepped up basis. Depreciation would begin again with basis at fair mv and when rental are sold, this new basis is what is used in the sale?

[Chief]

Stepped Up Basis

only 50% of it would be stepped up. The other 50% would be original amount.

[Davc]

so when one the one spouse died, all the rental properties they owned(jointly)would get
a stepped up basis. Depreciation would begin again with basis at fair mv and when rental are sold, this new basis is what is used in the sale?

Only if they were TITLED as community property. Generally JWRS property is not community property.

[WhiteOleander]

I'm in Texas.Texas is a community property state. If they had to include the entire FMV of the property into the value of the estate to determine if an estate tax had to be paid(Form 706), then the entire property receives the stepped-up basis.

If only part of the FMV of the property had to be included into the estate, then that is the portion that is stepped-up.

It is rare in Texas to have separate property.