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January 6, 2025
Question

Capital Gain Holding Period

  • January 6, 2025
  • 1 reply
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When a spouse dies in a community property state, and the basis of stock investments in stepped up, does the original purchase date determine if a gain/loss is long-term or short-term? Or is it the date of the step up in basis?

1 reply

Employee
January 6, 2025

@dbquicken , the step-up is only to the basis.  The holding period  does not get a change.   The real reason behind the step-up is to allow  free inheritance. if the asset is sold   soon after the inheritance event.

 

Does this make sense ?