When a spouse passes away in California, how the home was titled can decide how much capital gains tax the surviving spouse pays if they sell.
If the home was held as joint tenants, the surviving spouse usually gets a step-up in basis on only the deceased spouse’s half, or 50%. If it was held as community property with right of survivorship, the surviving spouse may get a step-up on 100% of the home. For a house bought decades ago in Redondo Beach, Palos Verdes or anywhere in Los Angeles County, that difference can be very large.
In this short video, Eric Baskett, a Century 21 Coastal Properties agent with 21 years of experience and 53 probate and estate sales, explains why he calls it the “I love you” way to hold title, and why it has to be set up before anyone passes.
Thinking about selling a home after losing a spouse or parent? Eric offers a free consultation and a free home value estimate, with no obligation. Call or text 310-807-6879.
Frequently asked questions
What is a step-up in basis?
When someone inherits property, its tax basis can be reset to its market value at the date of death. That can greatly reduce the capital gains tax owed when the property is later sold.
Can we change how our home is titled?
Yes. A married couple can usually change how title is held while both spouses are living. It can’t be changed after one spouse passes, so talk with an estate planning attorney or CPA now.
Eric Baskett | Century 21 Coastal Properties | DRE 01446685. Educational only, not tax or legal advice. Confirm your situation with a CPA or estate planning attorney.
