A parent in California transfers their primary residence to their adult child under Proposition 19. The parent's Prop 13 assessed value is $200,000. The property's current market value at the time of transfer is $1,400,000. If the child uses it as their primary residence, what is the child's new assessed value under the Prop 19 exclusion?
Correct Answer
B) $400,000
Step 1: Under Prop 19, the exclusion for parent-to-child primary residence transfers is limited to $1,000,000 over the existing assessed value. Step 2: Market value ($1,400,000) minus assessed value ($200,000) = $1,200,000 difference. Step 3: The first $1,000,000 of this difference is excluded from reassessment. Step 4: The excess above the exclusion = $1,200,000 - $1,000,000 = $200,000. Step 5: New assessed value = Original AV + excess = $200,000 + $200,000 = $400,000.
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