Question: Can a surviving spouse get the stepped up basis on real property from the deceased spouse when the real property ( second home) is in a living trust when the spouse died? If a gain is realized on the sale of property, does the surviving spouse get the preferred capital gain rates?
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Basis
If the home was 100% deceased spouses then the surviving spouse would get a 100% stepped up basis. If the home was in both names she would only get his share stepped up. The gain if property was sold would be a capital gain taxed at capital gain rates unless they had depreciated the property in the past . In that case you might have some 1250 recapture.
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