Step Up in Basis

[cpa72]

Good afternoon,

Thank you in advance for your input.  I have a client who jointly owned rental properties with her spouse.  Spouse passes away during 2023.  Properties have been fully depreciated.  Surviving spouse continues to lease the properties.

Does surviving spouse get to depreciate the stepped-up basis in the deceased 50% of the property?

For example, if the property appraises at 100,000 at date of death, 50% of that value is $50,000.

Does surviving spouse get to depreciate the $50,000?

[BobKamman]

Are they residents of a community-property state?

[cpa72]

No.  Its Florida, which is not a community property state

[MICHAELMARS]

If not, the answer is yes. Spouse gets a 50% step up, don't forget to allocate some of the step up to land.

[cpa72]

Thank you.  And, yes a portion goes towards land.

Appreciate the input.