Property Situation: Property was acquired prior to marriage and upon marriage in 1996 the Title remained in original owners name where both parties lived until around 2008. Original Owner passed away in 2011. In July 2024, the surviving spouse sold the property. There was never an appraisal conducted at time of owning parties death.
Surviving spouse situation: The surviving spouse never remarried and has not lived at the property since around 2008.
Additional Information: I have had conflicting information found between Google, IRS tax codes, and what different CPA's have said. I have been unable to verify anything related on the NCDOR tax code website. We used a highly recommended CPA in our area and they state that even though the surviving spouse never had the property in their name during the marriage and it was acquired prior by the original owner, only 50% step up basis can be claimed and the other 50% is based on the valuation at time of marriage. This contradicts what I have found when conducting Searches as well as asking a third party CPA in the area as everything points to "North Carolina is a common law property state, not a community property state, meaning each spouse generally owns their own property". We are also in the process of getting a retroactive appraisal conducted back to date of death in 2011.
Question: What is the proper way Step-up basis should be calculated for this situation in order to determine Capital gains?
