Brad and Heather are husband and wife and live in New Mexico. Under Brad's will, his share of the community property passes to the children. Upon Brad's prior death, there will be a change in Heather's income tax basis in her half of the community property.

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When Brad dies, Heather's income tax basis in her half of the community property will be adjusted to its fair market value on the date of Brad's death, which is known as a step-up in basis. Since Brad's will states that his share of the community property passes to the children, his half will go through probate and receive a step-up in basis as well.

Brad and Heather Are Husband and Wife and Live in New