Terry53029
Level 15
Level 15

The surviving spouse receives a step-up in basis when the first spouse dies. However, the value of that adjustment depends on whether they live in a community property state. In a community property state, the surviving spouse receives a full step-up in basis. Meaning their basis becomes the fair market value of the asset at the time their spouse passed. In a common law state the surviving spouse gets a step up of half the FMV

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