Community Property States--Tax Basis
In my former life on this forum I was known as "Charlie" and before that
"Chuck-Lyn". I am returning from limbo to pass on an important piece of
information just acquired. Namely,
In Community Property States like Texas, California and 7 others, the
tax basis of community property steps up to fair market value of the
property on the date a spouse dies. This is explained in IRS publication
# 555. I learned this recently when my wife's uncle-in-law passed away
and she acquire POA authority of her aunt's affairs. Since Lyn's eyes
glass over on financial things, I am helping her out.
In her aunt's case, the dear lady had worked for TXU her entire career and
accumulated quite a bit of company stock along the way. You may know
that TXU is going private through a buy-out. It was giving me heart burn
thinking about the big capital gain she would encounter until I learned this
welcome news. At least it was news to me.