Hal_Al
Level 15

Deductions & credits

Using an example: Grandma & grandpa bought a house in 1960 for $50,000.  Grandpa died in 2000 when the house was worth $200,000. Grandma's cost basis is now  $125,000 (half of $50,000 + half of $200,000).  If they lived in a community property state, the cost basis becomes the full $200,000.