My client's husband recently passed away a month ago. He had no will, so everything he had passed to his wife.
As part of her husband's belongings, the client received a bronze statue, created by a very famous artist. Her husband had originally received this artwork as a gift from his former father-in-law 20 years ago, when he was married to his 1st wife. The client is wife #2.
Client is in a financial situation where she has to sell the artwork. Christie's auction house wants to sell her bronze statue and believes they can get between $40K -$60K pre-commission. She's worried about the tax effect. I am thinking there is no tax effect since she inherited the artwork when her husband passed and it has a stepped-up basis to the current market value. They live in a community property state (AZ), but since the husband received the artwork before they were married, I think it's not joint property.
I want to make sure I'm on the right track with the basis.
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Sounds right to me. a quick google search didnt show me anything that says collectibles wouldnt get stepped up basis same as any other inherited asset.
Sounds right to me. a quick google search didnt show me anything that says collectibles wouldnt get stepped up basis same as any other inherited asset.
Thank you. My concern is that it meets all the requirements for a community property state in AZ -that it isn't considered community property.
Thank you!
There were no children from the previous marriage? They might have a claim on the separate property (and his half of the community property, as well). But the basis, for whoever is entitled to it, gets stepped up 100% at his death.
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