Alaska has an unusual Community Property Statute that can provide favorable income tax benefits to married couples with appreciated real estate assets or stock. Under Alaska law couples can agree to treat some or all of their property as community property and receive a full “adjustment to basis” upon the death of the first spouse. This means that at the death of the first spouse, the community property asset typically enjoys an increase in basis to the current fair market value, allowing the surviving spouse to avoid substantial capital gains taxes on the sale of the property after the death of the first spouse. We counsel all of our married clients about the tax benefits of community property and we help our clients establish community property agreements and community property trusts to take advantage of Alaska’s special community property law.
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