The Motley Fool Discussion Boards

Previous Page

Financial Planning / Tax Strategies


Subject:  Re: Home Limits Date:  12/7/2002  1:22 AM
Author:  edcosoft Number:  62411 of 128043

Even if you don't live in a community property state, upon the first death 1/2 the house gets a step-up in basis and the other 1/2 gets a step-up on the second death. That eliminates even more of the "lost" $250K tax break. In a community property state you get the WHOLE house stepped up in basis at first death and again at the second death.

If you didn't get this step-up in basis the heirs would have to not only pay 50% Estate tax, but 20% Capital Gains tax.

If you both live and then sell at more than a $500K profit you'll just have to pay the tax---( :>(. ed
Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us