Riverside, CA asked in Real Estate Law and Tax Law for California

Q: How are my capital gaines determined on a property I purchased in 1989 in CA?

How are capital gaines determined when property i owned jointly and you are the last surviving owner

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1 Lawyer Answer
Jonathan Purcell
Jonathan Purcell
  • Tax Law Lawyer
  • Licensed in California

A: 1. In general, basis is the purchase price of property plus capital improvements, less accumulated depreciation.

2. On death, basis is revalued at the date of death fair market value (DOD FMV), usually by appraisal.

see, 26 U.S. Code § 1014

3. If the spouses each held their respective share of the property as SEPARATE property, on the death of the pre deceasing spouse, one half of the spouses' share of the property basis is revalued to DOD FMV. The other half of their share is valued according pursuant to 1., above.

4. If the spouses held the property as COMMUNITY property, on the death of the pre deceasing spouse, both halves of their share of the property basis are revalued to DOD FMV.

see, 26 U.S. Code § 1014(b)(6)

5. The donor's basis of gifted property is transferred to donee.

see,26 U.S. Code § 1015

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