Ed and Cheryl have been married for 27 years. They own land jointly with a basis of $140,000. Ed dies in 2008, when the fair market value of the land is $220,000. Under the joint ownership arrangement, the land passed to Cheryl.
a. If Ed and Cheryl reside in a community property state, what is Cheryl's basis in the land?
b. If Ed and Cheryl reside in a common law state, what is Cheryl's basis in the land?© BrainMass Inc. brainmass.com June 3, 2020, 11:38 pm ad1c9bdddf
a. In a community property state, the step up in basis as a result of death of either spouse results in a step up of both halves of ownership. That is the result of the definition of community property ...
The solution compares Cheryl's basis in land after death of Ed as if in a community property state, and in a common law state.