# Ohio Trust Resets Rental Tax Basis

> Ohio couples can reset rental property tax basis to current value when first spouse dies via Tennessee trust.
- Title: Ohio Trust Resets Rental Tax Basis · 24/7 Wall St. | Shortify
- Summary: Ohio couples can reset rental property tax basis to current value when first spouse dies via Tennessee trust. Ohio couples using Tennessee community property…
- Keywords: ohio, tennessee, community property trust, rental property, capital gains tax, step-up basis, tax reset, Trust, Resets, Rental, Tax, Basis
- Source: 24/7 Wall St. — https://247wallst.com/personal-finance/2026/10/08/they-bought-the-rental-in-1988-for-110000-the-day-the-first-of-them-dies-both-halves-will-reset-to-what-its-worth-that-morning-because-of-a-tennessee-trust-theyll-sign-without-ever-leaving-oh
- Author: David Beren
- Published: 2026-10-08T16:22:14+00:00
- Read time: 1 min
- Topics: ohio, tennessee, community property trust, rental property, capital gains tax, step-up basis, tax reset
## Ohio Rental Tax Reset
A single trust document signed in ohio could legally erase decades of capital gains tax baked into a rental property.
## 1988 Purchase Example
They bought a rental in 1988 for $110,000 but the tax reset happens when the first spouse dies.
## How It Works
When the first spouse dies, the trust splits assets: one half treated as deceased spouse's share and one half as surviving spouse's share.
## Tax Reset Benefit
The trust resets the basis for both halves to fair market value at death, eliminating capital gains tax on appreciation.
## Tennessee Trust Rule
Tennessee became the second state to let couples opt into community property through a trust in 2010.
## IRS and Legal Risks
The IRS has never tested these trusts and a 1944 Supreme Court precedent could block the tax reset.
## Who Benefits
This works for married couples with appreciated assets like rental properties but not for retirement accounts or life insurance.
## Setting Up the Trust
Hire an estate attorney to draft a trust that declares it a tennessee community property trust with both spouses signing.
## Key takeaway

Ohio couples using Tennessee community property trusts reset rental property tax basis to market value when first spouse dies.