Does a surviving spouse get a step-up in basis on jointly owned assets?

It depends on how the property is titled and your state. In most states, when one spouse dies, only the deceased spouse's half of jointly owned property gets a step-up in basis; the survivor's half keeps its original cost. In the nine community property states, the rules are more generous: both halves of community property can step up to the date-of-death value, a big advantage.

This matters when a surviving spouse later sells an appreciated home or portfolio. A double step-up in a community property state can erase far more capital gain than a single step-up elsewhere. Because titling and state law drive the outcome, review deeds and account registrations with an estate attorney. The IRS discusses basis of inherited property at irs.gov.