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Janet63
New Member

Is it correct that the depreciation for a rental property in a community property state completely restarts after death of spouse?

I live in CA, a community property state and my spouse died last year.  I understand that the cost-basis for our jointly-held assets, including our rental property, steps up to the fair market value as of the dod.  And my further understanding is that the deprecation completely starts over as of the dod, at the new cost basis.  I mark all the "existing" rental assets as having been disposed of for no value as of the dod, and then enter new assets with the new basis. 

This means that when I sell the property the old depreciation is gone, just abandoned, and only the new depreciation is recaptured.  Is that really correct, legal, and proper?  Thanks so much folks. 

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MarilynG
Expert Alumni

Is it correct that the depreciation for a rental property in a community property state completely restarts after death of spouse?

Sorry for your loss.

Yes, you are correct the when the Asset is set up with the new DOD basis, all prior depreciation on the 'old asset' is wiped out.

This is indeed legal and proper.

Here's more info:

https://ttlc.intuit.com/replies/5886547

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2 Replies
MarilynG
Expert Alumni

Is it correct that the depreciation for a rental property in a community property state completely restarts after death of spouse?

Sorry for your loss.

Yes, you are correct the when the Asset is set up with the new DOD basis, all prior depreciation on the 'old asset' is wiped out.

This is indeed legal and proper.

Here's more info:

https://ttlc.intuit.com/replies/5886547

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Janet63
New Member

Is it correct that the depreciation for a rental property in a community property state completely restarts after death of spouse?

Thanks Marilyn, just wanted to be reassured I guess.  I also checked with my CPA, but I wanted to verify how to do it in Turbo Tax.  
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