Practice Areas
Estate Planning
Practice Areas
Many Chatsworth homes, from horse properties to ranch houses on large lots, were bought decades ago and are now worth several times the price. How that house passes to your family can decide whether your children owe capital gains tax when they sell. Alice A. Salvo, a State Bar Certified Specialist in Estate Planning, Trust and Probate Law, helps homeowners pick the right route. Her office is in Woodland Hills, a short drive south on Topanga Canyon. Call 818-676-9572.
When your children inherit your house, their tax basis is generally its fair market value on the date of your death. When you give them the house, or a share of it, while you’re alive, their basis is generally what you paid, adjusted for improvements (IRS Publication 551).
Here’s what that difference looks like. Say you bought in 1990 for $150,000 and the house is worth $1,200,000 today. If you add your daughter to the deed now, the share you gave her keeps your old basis, and she may owe capital gains tax on most of the growth when she sells. If she inherits instead, the basis resets to the value at your death, and a prompt sale may produce little or no taxable gain.
Adding a child to title has other risks too. The house becomes exposed to that child’s creditors or divorce, and you can’t sell or refinance without their signature.
Many couples hold title as joint tenants because it avoids probate when the first spouse dies. The survivor records an Affidavit of Death of Joint Tenant with the county (Los Angeles County Registrar-Recorder).
The tax result can be better with community property, though. In California, when a spouse dies, the whole value of community property generally becomes the new basis, including the survivor’s half (IRS Publication 551). With joint tenancy between spouses, generally only the half that belonged to the spouse who died gets a new basis. A living trust can hold the house as community property and still avoid probate.
California also allows a deed that passes the house automatically to the person named when the owner dies (California Courts Self-Help). It’s simpler than a trust, but it covers one property and does nothing if you become unable to manage your affairs while alive.
A living trust handles both. Your successor trustee can manage the property during an illness and transfer or sell it after death without probate. Our guide to setting up a trust explains how to deed the house into it, and trust administration covers what your trustee does later.
A new tax basis doesn’t protect your children from a property tax increase. Under Proposition 19, an inherited home is reassessed unless a child moves in as their primary residence within a year, and part of the value can still be reassessed (Board of Equalization Publication 800-1). Our Proposition 19 article has the details.
Alice Salvo holds an LL.M. in Estate Planning from the University of Miami and has received Martindale-Hubbell’s AV rating. Chatsworth clients can meet in Woodland Hills, by phone, or by video. The firm also serves Porter Ranch, Northridge, West Hills, and Canoga Park.
Usually not. A share you give away keeps your old tax basis, while an inherited house generally gets a new basis at its value on the date of death.
For taxes, community property is often better. The whole property generally gets a new basis when the first spouse dies, not just half.
A transfer on death deed covers one property at death only. A living trust also lets someone manage your affairs if you become unable to.
Bring your current deed and any existing will or trust. Call 818-676-9572 or send a message to set up a planning meeting.
Last updated November 13, 2026. Meet Alice A. Salvo, State Bar Certified Specialist in Estate Planning, Trust and Probate Law.