Peter and Nancy, a married couple in California, want to ensure that upon the death of either spouse, the surviving spouse receives the entire property AND a full stepped-up tax basis on both halves. Which form of title should their real estate agent recommend?
Correct Answer
D) Community property with right of survivorship
Community property with right of survivorship (CPWROS) under California Civil Code §682.1 provides both benefits: automatic transfer to the surviving spouse (avoiding probate) and a full stepped-up tax basis on both halves of the property under IRC §1014(b)(6). This combination is unique to CPWROS.
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Previous Question
Martin grants a fee simple determinable to a local church in California, stating the property shall be used 'so long as it is used for religious purposes.' The church has used the property for worship for 25 years. The church now wants to sell the property to a commercial developer. What happens under California law?
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Diana, a California homeowner, files a declared homestead on her primary residence. The home has a fair market value of $900,000, a mortgage balance of $500,000, and the current California homestead exemption is $300,000. A judgment creditor obtains a court order for forced sale. What is the MOST likely outcome?