Updated July 29, 2026. Quick answer: Yes — and the mechanism is a deeming rule rather than an exception. IRC §1014(b)(6) provides that the surviving spouse’s one-half share of community property “shall be considered to have been acquired from … the decedent”, provided at least one-half of the whole was includible in the decedent’s gross estate. So the survivor’s own half receives a new basis too.
Includible, not taxed
The condition is includibility in the gross estate, not estate tax actually paid. With the federal exclusion where it is, the overwhelming majority of estates owe nothing — and the condition is still satisfied. People routinely assume the double step-up is something only large estates get. It is not.
What it is worth
Consider a long-held taxable investment account owned by a married couple. In a community property state the entire account takes a new basis at the first death. In a common-law state only the decedent’s half does, and the survivor keeps their original basis on the rest — a difference that can be very large after decades of appreciation, on identical assets in an identical marriage.
The nine community property states, per IRS Internal Revenue Manual 25.18.1.2.3 and Publication 555, are Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. Guam and Puerto Rico are also community property jurisdictions.
Two things this does not reach. It does not apply to retirement accounts — §1014(c) excludes income in respect of a decedent entirely. And §1014(e) blocks the step-up where appreciated property was gifted to the decedent within one year of death and passes back to the donor, which is the anti-abuse rule that catches deathbed planning.
Sources
IRC §1014(a), (b)(6), (c) and (e); Treas. Reg. §1.1014-1(a) and §1.1014-2(a)(5); IRC §2040(b); IRC §691. State law as cited on each page from the state’s own codified statutes. The nine-state list is attributed to IRS Internal Revenue Manual 25.18.1.2.3 and Publication 555 rather than to fifty separate statutes. All read July 2026.
This states what the cited authority says. It is not tax advice, and retirement-plan design turns on facts about your business and your other entities that no page can see. Every dollar limit referenced here is indexed and changes annually.