--- title: How Community Property Trust Could Save You From Heavy Taxation description: Learn how a community property trust could save you from heavy taxation down the road. Call a Sioux City attorney, Omaha lawyer, or Sioux Falls attorney today! image: https://blog.goosmannlaw.com/hubfs/48597849_s.jpg --- [![Goosman Lawfirm](https://blog.goosmannlaw.com/hs-fs/hubfs/Goosmannlaw%20October2017/images/Goosmann_Law_Firm_logo_4C-white.png?width=1250&name=Goosmann_Law_Firm_logo_4C-white.png "Goosman Lawfirm")](http://goosmannlaw.com/) - [COVID-19 Toolbox](https://goosmannlaw.com/covid-19-resource-toolbox/) - Our Team - [Attorneys](https://goosmannlaw.com/attorneys/) - [Non-Attorney Staff](https://http://goosmannlaw.com/non-attorney-staff/) - Practices & Industries - [Practices](https://goosmannlaw.com/practices/) - [Banking & Finance](https://goosmannlaw.com/banking-finance/) - [Bankruptcy, Restructuring & Workouts](https://goosmannlaw.com/bankruptcy-restructuring-workouts/) - [Business](https://goosmannlaw.com/business/) - [Divorce & Family Law](https://goosmannlaw.com/divorce-family-law/) - [Employment](https://goosmannlaw.com/employment-law/) - [Environmental, Health & Safety](https://goosmannlaw.com/health-safety/) - [Estate Planning](https://trustlawcounsel.com) - [Gestational Surrogacy & Adoption](https://goosmannlaw.com/gestational-surrogacy-adoption/) - [International Law](http://goosmannlaw.com/international-law/) - [Litigation / Trial Law](https://goosmannlaw.com/litigation-trial-law/) - [Local Counsel](https://http://goosmannlaw.com/local-counsel/) - [Mergers & Acquisitions](https://goosmannlaw.com/mergers-acquisitions/) - [Rapid Response](https://goosmannlaw.com/rapid-response/) - [Industries](https://goosmannlaw.com/industries/) - [Agribusiness & Cooperatives](https://goosmannlaw.com/agribusiness-cooperatives/) - [Construction](https://goosmannlaw.com/construction/) - [Cyber Law and Telecommunications](https://goosmannlaw.com/cyber-law/) - [Education](https://goosmannlaw.com/education/) - [Health Care](https://goosmannlaw.com/health-care/) - [Manufacturing](https://goosmannlaw.com/manufacturing-law/) - [Multifamily Housing](https://goosmannlaw.com/multifamily-housing-law/) - [Non-Profit & Tax Exempt Organizations](https://goosmannlaw.com/non-profit-law/) - [Real Estate](https://goosmannlaw.com/real-estate/) - [Transportation](https://goosmannlaw.com/transportation/) - [Tribal](https://goosmannlaw.com/tribal/) - Our Firm - [Firm News](https://blog.goosmannlaw.com/firm-news) - Careers - [Attorneys](https://goosmannlaw.com/careers/attorneys/) - [Administration](https://goosmannlaw.com/careers/administration/) - [Internships](https://goosmannlaw.com/careers/internships/) - [Client Testimonials and Results](https://goosmannlaw.com/our-firm/client-testimonials-and-results/) - [Culture, Diversity, and Community](https://http://goosmannlaw.com/our-firm/culture-diversity-and-community/) - [Women-Owned Business](https://goosmannlaw.com/our-firm/women-owned-business/) - [Associations & Memberships](https://goosmannlaw.com/associations-memberships/) - [Firm History](https://goosmannlaw.com/firm-history/) - Blogs - [CEO Law Review](https://blog.goosmannlaw.com/ceo-on-your-side) - [Construction Lawyer](https://blog.goosmannlaw.com/construction-lawyer-on-your-side) - [Cyber Lawyer](https://blog.goosmannlaw.com/cyber-lawyer-on-your-side) - [Deal Maker](https://blog.goosmannlaw.com/deal-maker-on-your-side) - [Divorce Docket](https://blog.goosmannlaw.com/divorce-lawyer-on-your-side) - [Food for Thought](https://blog.goosmannlaw.com/agricultural-lawyer-on-your-side) - [HR Legal Insider](https://blog.goosmannlaw.com/human-resources-on-your-side) - [Law Doc](https://blog.goosmannlaw.com/health-lawyer-on-your-side) - [Paralegal Review](https://blog.goosmannlaw.com/paralegal-review/) - [Real Estate Lawyer](https://blog.goosmannlaw.com/real-estate-lawyer-on-your-side) - [Risky Business](https://blog.goosmannlaw.com/risk-manager-on-your-side) - [The Banker’s Suit](https://blog.goosmannlaw.com/banking-lawyer-on-you-side) - [Trial Law Review](https://blog.goosmannlaw.com/trial-lawyer-on-you-side) - [Trust Law Counsel](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side) - Resources - [COVID-19 Resource Toolbox](https://goosmannlaw.com/covid-19-resource-toolbox/) - [Podcast](http://podcast.goosmannlaw.com/) - [Videos](https://goosmannlaw.com/videos/) - [FREE eBooks & Tools](https://goosmannlaw.com/free-ebooks-tools/) - Contact Us - [Office Locations](https://goosmannlaw.com/locations/) - [Sioux City Law Firm](https://goosmannlaw.com/locations/sioux-city-law-firm/) - [Sioux Falls Law Firm](https://goosmannlaw.com/locations/sioux-falls-law-firm/) - [Omaha Law Firm](https://goosmannlaw.com/locations/omaha-law-firm/) - [Spirit Lake & Spencer Law Firms](https://goosmannlaw.com/locations/spirit-lake-and-spencer-law-firm/) - [Real Estate Closings Office](https://goosmannlaw.com/locations/real-estate-closing-office/) - [Submit a Testimonial](https://goosmannlaw.com/submit-a-testimonial/) - [Sign Up for Our Newsletter](https://goosmannlaw.com/sign-up-for-our-newsletter/) - [Pay Online](https://goosmannlaw.com/pay-online-3/) - [  (855) 843-4531](tel:855-843-4531) ![](https://blog.goosmannlaw.com/hubfs/Blog_Images/Lockbox%20Lawyer/close-button.png) [tel:855-THE-GLF1](tel:855-THE-GLF1) [Trust Law Counsel](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-law-counsel) # [How Community Property Trust Could Save You From Heavy Taxation](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/how-community-property-trust-could-save-you-from-heavy-taxation) By [Goosmann Law Team](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/author/goosmann-law-team)   |  30, June 2017 [READ NOW](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/how-community-property-trust-could-save-you-from-heavy-taxation) [Read Post](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/how-community-property-trust-could-save-you-from-heavy-taxation#article) [![](https://blog.goosmannlaw.com/hs-fs/hubfs/Logos/Logo1.jpg?width=60&name=Logo1.jpg)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/author/goosmann-law-team) [Goosmann Law Team](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/author/goosmann-law-team)  Tags: [Trust Law Counsel](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-law-counsel) ## ![48597849_s.jpg](https://blog.goosmannlaw.com/hs-fs/hubfs/48597849_s.jpg?width=600&name=48597849_s.jpg "48597849_s.jpg") ## When it comes to your family’s legacy, every dollar you can save from tax collection counts. One way to keep your assets out of the hands of the IRS is the formation of community property trusts. **How does a community property trust (CPT) work?** CPTs save you money on taxes by adjusting or “stepping up” the basis of the entire property after the death of one member of the couple. When you and your spouse invest in property jointly — be it real estate, stocks, or other assets — it becomes what’s called community property if you live within nine applicable states. However, there are two states, Alaska and Tennessee, where community property can be utilized via the creation of a community property trust, even if you do not live in Alaska or Tennessee. When couples work with their estate planning attorneys to create these trusts, they can take advantage of a double step-up on the property’s basis. The basis of the property is stepped-up to its current value for both members of the couple’s halves. This is different from jointly owned property which only receives the step-up on one-half of the property. That means capital gains taxes are much lower because the taxed amount is reduced thanks to the stepped-up basis. Community property helps couples reduce their income taxes after the death of a spouse. **Getting to know your basic CPT terminology** First, let’s start with a few quick definitions of the financial terms you will need to know to get a sense of whether or not a community property trust is right for you. - **Community property:** Assets a married couple acquires by joint effort during marriage if they live in one of the nine community property states: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin. - [**Community property trust:**](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/integrating-community-property-trust-into-your-estate-plan)A particular type of joint revocable trust designed for couples who own low-basis assets, enabling them to take advantage of a double step up. Tennessee or Alaska are the two places you can form these. - **Basis:** What you paid for an asset. The value that is used to determine gain or loss for income tax purposes. A higher basis means less capital gains tax. - **Stepped-up basis:** Assets are given a new basis when transferred by inheritance (through a will or trust) and are revalued as of the date of the owner’s death. The new basis is called a stepped-up basis. A stepped-up basis can save a considerable amount of capital gains tax when an asset is later sold by the new owner. - **Double step-up:** Because of a tax loophole, community property receives a basis adjustment step-up on the entire property when one of the spouses dies. So if a surviving spouse sells community property after the death of their spouse, the capital gain is based on the increase in value from the first spouse’s death (where the basis got adjusted on both spouses’ shares) to the value at the date of the sale. This allows the survivor to save money on capital gains tax liability. One of the best parts of estate planning is that you get out so much more than you put in. In just a short amount of time, we can implement a community property trust that could save your spouse and family tens of thousands of dollars down the road. We are here to help make sure as little of your hard-earned property as possible ends up lost to taxation. Give a Sioux City attorney, Omaha lawyer or Sioux Falls attorney today and set yourself up for a better tomorrow. [![CONTACT US](https://no-cache.hubspot.com/cta/default/489404/ec70fe7d-ad02-40c5-93ba-4800375ab6e9.png)](https://cta-redirect.hubspot.com/cta/redirect/489404/ec70fe7d-ad02-40c5-93ba-4800375ab6e9) ### Select Different CTA for each Post from Blog Editor [![New Call-to-action](https://no-cache.hubspot.com/cta/default/489404/a8cefc17-3b9d-4de0-89cd-e60a64752422.png)](https://cta-redirect.hubspot.com/cta/redirect/489404/a8cefc17-3b9d-4de0-89cd-e60a64752422) ### Subscribe Our Blog Thanks for submission!! - Recent - Popular ### Posts by Topic - [Trust Law Counsel (76)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-law-counsel) - [Estate Planning (62)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/estate-planning) - [Wills and Trusts (8)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/wills-and-trusts) - [Trust Planning (5)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-planning) - [Death Taxes (3)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/death-taxes) - [Business Succession (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/business-succession) - [Dynasty Trust (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/dynasty-trust) - [Inheritance (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/inheritance) - [Irrevocable Trust (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/irrevocable-trust) - [Last Will (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/last-will) - [Probate Fees (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/probate-fees) - [South Dakota (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/south-dakota) - [Succession Plan (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/succession-plan) - [Trust Protector (2)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-protector) - [COVID-19 (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/covid-19) - [Capital Gains Tax (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/capital-gains-tax) - [Cyber Legacy (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/cyber-legacy) - [Digital Assets (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/digital-assets) - [Disability Estate Planning (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/disability-estate-planning) - [Estate Litigation (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/estate-litigation) - [Fiduciary Rule (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/fiduciary-rule) - [Financial Exploitation of the Elderly (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/financial-exploitation-of-the-elderly) - [Financial Planning (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/financial-planning) - [Firm News (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/firm-news) - [Founder Equity in Estate Planning (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/founder-equity-in-estate-planning) - [Handwritten Intentions (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/handwritten-intentions) - [IRA (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/ira) - [IRAs (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/iras) - [Important Documents (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/important-documents) - [Liability Protection (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/liability-protection) - [Portability Election (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/portability-election) - [Probate (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/probate) - [Testament (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/testament) - [Trust Funding (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/trust-funding) - [Virtual Notarization (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/virtual-notarization) - [power of attorney (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/power-of-attorney) - [tax reform (1)](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/topic/tax-reform) DISCLAIMER: The information in this blog post (“post”) is provided for general informational purposes only, and may not reflect the current law in your jurisdiction. By visiting this website, blog, or post you understand that there is no attorney client relationship between you and the Goosmann Law Firm attorneys and website publisher. No information contained in this post should be construed as legal advice from Goosmann Law Firm, PLC, or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this Post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction. #### Let Us Know What You Thought about this Post. Put your Comment Below. [Previous Post](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/integrating-community-property-trust-into-your-estate-plan) ##### [Integrating Community Property Trust Into Your Estate Plan](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/integrating-community-property-trust-into-your-estate-plan) [Next Post](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/do-you-really-need-a-will-the-answer-is-yes) ##### [Do You Really Need a Will? The Answer is Yes](https://blog.goosmannlaw.com/estate-planning-laywer-on-your-side/do-you-really-need-a-will-the-answer-is-yes) ### Contact Info **Sioux City Location** P. 712-226-4000 F. (712) 224-4517 **Sioux Falls Location** P. (605) 371-2000 F. (605) 275-2039 **Omaha Location** P. (402) 280-7648 F. (402) 505-3967 --- [Disclaimer](http://goosmannlaw.com/list-all-blogs/disclaimer/) | [Privacy Policy](http://goosmannlaw.com/privacy-policy/) ### Locations **Sioux City Location** 410 5th Street Sioux City, IA 51101 **Sioux Falls Location** 5010 S. Minnesota Avenue, Suite 100 Sioux Falls, SD 57108 **Omaha Location** Advent Building 17838 Burke Street, Suite 250 Omaha, NE 68118 ![Goosmann](https://blog.goosmannlaw.com/hs-fs/hubfs/Blog_Images/Lockbox%20Lawyer/goosmann-white.png?width=250&name=goosmann-white.png "Goosmann") Goosmann Law Firm is a FULL SERVICE LAW FIRM with locations in Sioux City, Iowa, Sioux Falls, South Dakota, and Omaha, Nebraska. Goosmann Law attorneys are licensed to practice in Iowa, Nebraska, South Dakota, and North Dakota. Their attorney team's practices and industries include but are not limited to Agribusiness and Cooperatives, Banking and Finance, Bankruptcy, Restructuring and Workouts, Business, Construction, Cyber Law and Telecommunications, Divorce and Family Law, Education, Employment, Environmental Health and Safety, Gestational Surrogacy and Adoption, Health Care, Litigation and Trial Law, Manufacturing, Mergers and Acquisitions, Municipal, Nonprofit and Tax Exempt Organizations, Real Estate, and Transportation, Tribal, Wills, Trusts, Estate Planning, and Probate Law. Goosmann © Copyright 2017