Husband buys cottage, dies and leaves to wife, wife remarries and dies after 23 yrs, leaves cottage to hubby. Is there a step up value from original purchase so if husband gives cottage to his kids there won't be a huge cap gains ax?
tks all
bw
stepup home value
Jul 22, 2014
2 Replies
When 2nd husband inherits -- assuming he does -- his basis is FMV on date of her death.
WHen you give away appreciated property, assuming it has not lost FMV value, the recipients have the donor's basis.
Assuming you mean the second husband, the answer is a definite maybe.
Assuming wife was owner of 100% of the house on her date of death (that is to say that the husband hadn't been put on title and he has no other marital interest), then the basis gets stepped up to full market value on wife's death.
So if second husband then gives the house to his kids, their basis will be the value on the wife's date of death.
If, on the other hand, husband keeps title in his own name and leaves it to his kids when he dies, then the kids' basis will be the market value on their father's date of death, not their step- mother's.
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