Many surviving spouses in Los Angeles and Orange County hold onto a house they no longer want, simply because of the tax bill on selling it. The way title was held before the first spouse passed can change that.
- Joint tenancy: step-up in basis on about half the home.
- Community property with right of survivorship: a possible step-up on the full value.
A full step-up resets the tax basis to today’s value, which can greatly reduce capital gains if the surviving spouse decides to sell, for example because they no longer want to manage a rental.
Eric Baskett has helped families with inherited and estate homes for 21 years. If you’re weighing whether to keep or sell a home after a loss, he’ll walk you through your options at no cost. Call or text 310-807-6879.
Common questions
Do I pay capital gains if I sell my house after my spouse dies?
It depends on how the home was titled. Community property with right of survivorship may allow a step-up on the full value, while joint tenancy usually steps up only the deceased spouse’s half. Confirm your situation with a CPA.
What is the best way for a married couple to hold title in California?
Many couples choose community property with right of survivorship for the potential tax benefit, but the right choice depends on your situation. It must be set up before either spouse passes, so talk with an estate planning attorney or CPA.
Eric Baskett | Century 21 Coastal Properties | DRE 01446685. Educational only, not tax or legal advice.