Neal and his wife Faye reside in Texas, a community property state.Their community property consists of real estate (adjusted basis of $800,000; fair market value of $6 million) and personal property (adjusted basis of $390,000; fair market value of $295,000).Neal dies first and leaves his estate to Faye.What is Faye's basis in the property after Neal's death?

Question

Quizplus · Accepted Answer

In a community property state, when one spouse dies, the entire property receives a step-up in basis to the fair market value at the date of death. Therefore, Faye's basis in the real estate is $6,000,000 and in the personal property is $295,000.

Neal and His Wife Faye Reside in Texas, a Community