Question on of a stepped up basis asset. Husband and wife own a rental property. Husband passes away and wife keeps rental property but now has a step up in basis. Original depreciable basis (not including land) was $100k. This was fully depreciated before the husband's death. Now new depreciable basis is $350k due to step up in basis for the wife. Do I now depreciate the full $350k (essentially getting to depreciate that first $100k twice) or do I depreciate $250,000 (the new basis of $350,000 - the amount that was already depreciated of $100k). I feel like I should know this but my mind is so tired! Any help would be welcome! Thank you all!
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Stephanie Whitman
Add the 250k step-up as a separate asset with its own schedule.
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Stephanie Whitman
Add the step-up as a separate asset with its on schedule. Step-up basis is $350k.
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Todd Brown
Depends on if they are in a community property state or not. If they’re in a community property state the entire basis will be stepped up from $0 to $350k and you can start depreciating the $350k. If they are not in a community property state only half the basis is stepped up.
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David Johnson
•Yes, in CA (community property state). So just verifying that the first $100k that’s already been depreciated before the husband died gets to be depreciated again?
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Todd Brown
•Yep, it's just like they bought it and wrote a check for $350k.
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David Johnson
•Awesome. Thank you for your help!
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Tom Maxon
To all those having trouble reaching a human at IRS. I just ran across this video that gave me a shortcut to reach a human. Hope it helps! https://youtu.be/_kiP6q8DX5c
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