Estate Planning: What You Need to Know about Basis

Stoel Rives attorney Wendy Goffe provides some lessons about marital assets, estate planning and basis in a Morningstar article by Deborah Jacobs titled “What every investor needs to know about basis.” The article discusses estate planning options that can help maximize tax basis and minimize capital gains tax.

Goffe explains how married couples living in a community property state (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin) have a basis advantage. Under community property rules, unless you formally agree otherwise, most of what you acquire once you are married and living in one of these nine states is community property, and you are each considered a one-half owner. Therefore, when the first spouse dies, both halves of the property get a step up in basis. This minimizes capital gains tax if the surviving spouse sells the property.

“What every investor needs to know about basis” was published by Morningstar, March 25, 2015.