Dear Liz:

I co-own a house with my long-term boyfriend. If one of us passes away, how does the capital gains step-up impact the surviving partner?

Answer: The deceased partner’s share of the home gets a new tax basis, while the survivor’s Portion remains unchanged.

A tax basis is crucial for figuring out how much capital gains tax you might incur when selling your home or other appreciated assets. Typically, your basis is the purchase price of the home plus any qualified adjustments.

Assets that are inherited usually receive a step-up to their current market value for tax purposes. This means that no taxes will be owed on the appreciation that occurred during the original owner’s lifetime.

For married couples residing in community property states like California, the entire home may adjust to its current market value upon the death of the first spouse. This is referred to as a double step-up. It’s important to mention, however, that this benefit is restricted to married couples in community property states. Unmarried couples in these states, as well as couples in other states, don’t enjoy this advantage.

Dear Liz:

I retired early and have been using COBRA to keep my employer’s health insurance until I’m eligible for Medicare. I’m facing a three-month gap in coverage and would appreciate any advice on how to handle this, considering I’m generally healthy, but you never know what could happen.

Answer: It’s really best to avoid being without health insurance, even for a day. Fortunately, affordable care exchanges can help fill that gap.

Once you get the notice that your COBRA coverage has ended, you can start your application at Healthcare.gov.