# California Home Tax Reset After Spouse Dies

> Community property law resets home basis for both spouses after death, letting survivors sell with minimal tax.
- Title: California Home Tax Reset After Spouse Dies · 24/7 Wall St.
- Summary: Community property law resets home basis for both spouses after death, letting survivors sell with minimal tax. When a spouse dies in California, community…
- Keywords: california, community property, tax basis, capital gains, home sale, spouse death, irs, step-up basis, Home, Tax, Reset, Spouse
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/27/theyve-owned-the-house-together-in-california-since-1984-when-he-dies-community-property-law-will-reset-the-basis-on-both-halves-not-just-his-and-she-can-sell-it-the-next-month-with-almost-no-ga
- Author: David Beren
- Published: 2026-10-27T17:08:37+00:00
- Read time: 1 min
- Topics: california, community property, tax basis, capital gains, home sale, spouse death, irs, step-up basis
## California Home Tax Reset After Spouse Dies
A California couple buys a modest house in 1984, watches it grow into a seven-figure asset, and then one spouse dies.
## Community Property Resets Tax Basis
Under community property law, both halves of the home reset to fair market value at the first spouse’s death, wiping out most capital gains.
## Tax Basis Reset Example
If a house cost $100,000, was worth $1.5 million at death, and sold for that amount, the community property survivor has almost no gain.
## Community Property States
California, Arizona, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin are the nine community property states.
## Title Matters for Reset
California couples holding title as joint tenants may get a step-up only on the deceased spouse’s half unless they have community property with right of survivorship.
## Selling Within Two Years
A surviving spouse who sells within two years of death and hasn’t remarried may exclude up to $500,000 from capital gains tax.
## Double Reset Risk
If a community asset is worth less than its basis at death, both halves step down, and the survivor loses any built-in loss she could have deducted.
## Steps to Secure Reset
Pull the deed, confirm title, order an appraisal, and check the home-sale exclusion for minimal tax impact.
## Key takeaway

When a spouse dies in California, community property law resets the home's tax basis for both halves, allowing the surviving spouse to sell with almost no capital gains.