[WSBAPT] out of state real property in an estate

[Heather de Vrieze]

Perhaps I'm missing something, but assuming the wife ends up with 100% of this property, either she inherited 100% because it all belonged to husband, so stepped up basis in 100% or she inherited ½ because it was community property, and she owned ½ already. Then, as CP, she would get a step up in basis. I can't think of any reason this property would not have a new basis equal to its fair market value at husband's death.

Heather

Heather S. de Vrieze
Attorney-at-Law
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Jenna Brozik
Sent: Thursday, February 23, 2023 3:11 PM
To: WSBA Probate & Trust Listserv <wsbapt at lists.wsbarppt.com>
Subject: [WSBAPT] out of state real property in an estate

Hello listmates,

I have a probate case where the property was bought by a married couple in 1993 with community funds in Illinois.  The property was only titled in the husband's name although it was bought by the community with community funds and remained community property.

The husband died in Washington State.  For IRS purposes, doesn't the wife get a step up in basis on the entire property, not just the 50% that is her community portion?  For the purposes of this discussion, the husband died without a will, so intestate.   Illinois is not a community property state, does that matter?

Any comments or suggestions would be appreciated.

Thank you,

Jenna Brozik
Managing Attorney
PRINZ & BROZIK PLLC
445 S. Grand Avenue
Pullman, WA 99163
509-338-0908 Telephone
509-338-3527 Facsimile

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