Community Property vs. Joint Tenancy

How Married Couples Can Hold Title in Nevada

If you’re a married couple buying a home in Nevada, you’ll need to decide how to hold title to your property. This page explains:

1. The different ways married couples can hold title.
2. What happens to the property when one spouse passes away.
3. How each option affects federal income taxes.

Note: Not covered on this page is holding property in a trust.

For simplicity, we’ll use “Husband and Wife” throughout, but this applies equally to same-sex couples.

How Married Couples Can Hold Property in Nevada

Nevada law says married couples can hold property as:

• Joint Tenants
• Tenants in Common
• Community Property

Joint Tenants and Community Property both can include “with rights of survivorship,” which means the surviving spouse automatically owns the property when the other dies.

So, the main options are:

• Joint Tenants
• Joint Tenants with Rights of Survivorship
• Community Property
• Community Property with Rights of Survivorship
• Tenant in Common

What Is Community Property?

In Nevada, most property acquired during marriage is community property. This means both spouses own it equally—even if one spouse earns the income and the other stays home. Gifts, inheritances, and property owned before marriage are separate property.

Why Does This Matter for Taxes?

When someone inherits property, the IRS gives them an “adjusted-up in basis.”
“Basis” is the value used to calculate taxes when the property is sold later.  [IRC 1014(a)]

Example:

If your spouse bought a home for $200,000 and it’s worth $350,000 when s/he pass away, your new basis is $350,000.
If you sell for $350,000, you owe no tax.

Special Rule for Community Property: In Nevada, both halves of community property get this step-up in basis. [IRC 1014(b)(6)]So if you and your spouse owned a home worth $350,000 when one of you dies, the surviving spouse’s basis becomes $350,000—not just half. This can save thousands in taxes.

Important: A qualified appraiser must determine the value at the date of death. Zillow estimates or loan appraisals don’t count.

If a married couple held property as joint tenants (not as community property), the IRS could construe the election as separate property. That means the surviving spouse does not receive a step-up. The surviving spouse would have a gain of $75,000 calculated as follows: $350,000 – 275,000 ($175,000 deceased spouses value at date of death + $100,000 surviving spouses share of the purchase price).

Where Confusion Happens

At closing, the title officer will ask: “How do you want to hold title?”

You’ll see options like:

• Husband and Wife, as Tenants in Common
• Husband and Wife, as Joint Tenants
• Husband and Wife, as Joint Tenants with Rights of Survivorship
• Husband and Wife, as Community Property
• Husband and Wife, as Community Property with Rights of Survivorship

Most couples ask:

“What do most people choose?” The title officer often says: “Joint Tenants with Rights of Survivorship.” Couples usually go with that—without realizing the tax benefits of community property.  The surprise is the IRS can construe the selection of any form of Joint Tenancy as the married couple is electing out of community property benefits under IRC 1014(b)(6).  That means the surviving spouse DOES NOT received step-up for his/her share in the property. Had the married couple selected community property, they would have made clear to the IRS they want the benefit under IRC 1014(b)(6) – a full step for both spouses share.  The IRS cuts square corners – that means the IRS does not like confusion – they want clear elections showing intention.

What Happens When a Spouse Dies?

Here’s how title transfers:

Probate means going through court to change title.

Operation of Law means filing a death certificate and a simple form—no court.

So, Community Property with Rights of Survivorship avoids probate AND keeps the tax benefits. Joint Tenancy also avoids probate, but may cause confusion and potentially lose community property tax benefits.

About Kirk D. Kaplan

Kirk has been an estate planning attorney for 30 years, and a CPA who has prepared taxes and performed tax planning for 35 years. He has been married for nearly 40 years to the same woman and has a life time passion of performing magic. He is a Magician Member of the Academy of Magical Art and performs a the famed Magic Castle Club in Hollywood, California and has a magic show for senior citizens called Magic Hands.  He brings story telling skills learned in Magic to translate complex estate planning and tax concepts to everyone.

Disclaimer:

The discussion herein is meant to give the reader and overview of Nevada Community Property and Federal tax laws. It should not be taken as legal advice. Each person’s and married couples’ circumstances differ. If you are considering electing community property you should consult competent legal counsel to hear and understand the good and the bad.

Published: January __, 2026