Updated October 8, 2026. Quick answer: Yes. California is a community property state. Family Code section 760 makes property acquired by a married person “during the marriage while domiciled in this state is community property”, except as otherwise provided by statute. The IRS lists nine community property states.
California community property at a glance
| Item | What the documents say |
|---|---|
| Regime | Community property |
| At divorce | The court divides the community estate equally (Family Code section 2550) |
| At a spouse’s death | One-half of the community property belongs to the surviving spouse (Probate Code section 100) |
| Federal basis at the first death | Both halves of community property can take a new basis at the first death (26 U.S.C. 1014(b)(6)) |
| Source | California Legislature (Legislative Counsel); IRS Publications 551 and 555; 26 U.S.C. 1014 |
What the California statutes say
The rule is Family Code section 760. The Legislature’s text applies it to property acquired by a married person during the marriage while the person is domiciled in California, and the statute carries its own exceptions for separate property.
A couple who moved in is covered too. Family Code section 125 defines quasi-community property as property acquired “By either spouse while domiciled elsewhere which would have been community property” had the spouse been domiciled in California, so the California rules reach what the couple brought with them.
At divorce in California
At divorce, Family Code section 2550 directs the court to “divide the community estate of the parties equally”, unless the spouses have agreed otherwise in writing or by stipulation in open court.
At a spouse’s death in California
Probate Code section 100 covers a married person’s death. It says that “one-half of the community property belongs to the surviving spouse” and that the other one-half belongs to the decedent.
What it does to basis when the first spouse dies
The federal basis rule is why the label matters to a couple. IRS Publication 551 says that when a spouse dies in a community property state, the total value of the community property “generally becomes the basis of the entire property”. The rule applies only if at least half the value of the community property interest “must be includible in the decedent’s gross estate”. The statute behind it, 26 U.S.C. 1014(b)(6), covers “property which represents the surviving spouse’s one-half share of community property”.
Computed illustration, not tax advice: suppose a California couple paid $100,000 for shares worth $400,000 when one spouse dies, and all of it is community property with at least half included in the decedent’s gross estate. The survivor’s basis in the whole becomes $400,000. A sale at that value shows no gain. Held instead as a qualified joint interest in a common law state, only one half is included in the estate, and the survivor’s basis is the total of two halves: $200,000 for the half that steps up plus $50,000 as the cost of the survivor’s own half, which makes $250,000. A sale at $400,000 would then show a gain of $150,000. CMG’s community property step-up page and common law step-up page go through the same difference.
Common mistakes
- Assuming a house bought before the wedding is community property; section 760 reaches property acquired during the marriage, and the statute lists exceptions.
- Assuming the answer in this state settles it for a couple who move; the rules depend on the state where the spouses are domiciled and, for property in a trust, on the trust.
Related: community property states by state, how both halves step up in a community property state, California retirement taxes, and California probate cost.
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Answer againSources
- Family Code section 760 (Community Property), California Family Code: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM§ionNum=760
- Family Code section 2550 (equal division), California Family Code: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM§ionNum=2550
- Probate Code section 100 (death of married person), California Probate Code: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB§ionNum=100
- Family Code section 125 (quasi-community property), California Family Code: https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM§ionNum=125
- IRS Publication 551, Basis of Assets (December 2025): https://www.irs.gov/pub/irs-pdf/p551.pdf
- 26 U.S.C. 1014, Basis of property acquired from a decedent (United States Code, 2024 Edition): https://www.govinfo.gov/link/uscode/26/1014?link-type=html
Sources: the primary documents linked above, read on October 8, 2026. General information, not tax advice. Your own facts decide the outcome, and a tax professional or the state agency itself is the right place to confirm anything consequential.