Keep me logged in until I sign out. There is no longer a California gift tax. The federal estate tax is a tax levied on the property owned by the decedent at death. California has eliminated a separate estate tax on the decedent's property. The determination of fair market value is generally made as of the date of death, however, there is an alternative valuation date of 6 months after death available for estates that have decreased in value.
Tax basis refers to the value of the property for computing gain or loss.
It is usually the cost of the property plus improvements and less any depreciation. With community property, even though 50 percent passes outright to the surviving spouse, both portions of the community property receive a stepped-up basis at the death of the first spouse. The stepped-up basis rule does not apply to certain income the decedent earned prior to his or her death. IRD includes income from property sold prior to death, unpaid compensation and retirement benefits.