step up/down basis in trust

[grandmabee]

a couple have a trust and one dies the stock in the trust does it get a step up basis? they live in a community property state. the original trust list both names not the trust just list the wife's name.

[kcjenkins]

Yes, it gets stepped up.

[grandmabee]

thank you. I wasn't sure if trust would change things and I am correct in assuming she get 100% step up(hope)down on stock because of community property state

[jainen]

>>assuming she get 100% step up(hope)down on stock because of community property state<<

Also assuming the stock was held as community property, and the trust was a family or living trust that was disregarded for tax purposes.

[grandmabee]

>>assuming she get 100% step up(hope)down on stock because of community property state<<

Also assuming the stock was held as community property, and the trust was a family or living trust that was disregarded for tax purposes.

the trust was a family trust and disregarded for tax purposes. the stock dividents and 1099-b were and is listed in the family trust name so does this mean stock was held as community property? If not how do I tell if held as community property?

thanks

[jainen]

>>how do I tell if held as community property?<<

Start with how it is titled. In my experience, property held jointly is usually considered to be community property if it was acquired from joint funds during the marriage. This is generally true even if actual title is joint tenant or separate, but that would require a bit more clarification. Property titled as tenants in common, partners, shareholders, and so on is less likely to be community property. Also a pre- or post-nuptial agreement can be relevant.

In my opinion, this information should come primarily from the client. However, it often makes the interview awkward when the client doesn't have a clue what you're talking about. But we muddle along.