Property OwnershipIntermediateArizona Exam

What is the primary advantage of holding title as 'community property with right of survivorship' versus regular 'community property' in Arizona?

AAvoidance of probate while retaining the tax benefit of a stepped-up basis on the entire property
BLower property tax assessments because the county assessor must recognize both spouses' contributions to the property's value when calculating the tax baseCorrect
CA higher homestead exemption of up to $375,000, versus the standard $250,000 exemption available to properties held as regular community property
DComplete protection from the creditors of either spouse, since community property with survivorship rights cannot be reached by any separate creditor claim

Why Lower property tax assessments because the county assessor must recognize both spouses' contributions to the property's value when calculating the tax base Is Correct

Answer B: Lower property tax assessments because the county assessor must recognize both spouses' contributions to the property's value when calculating the tax base

Community property with right of survivorship avoids probate (the surviving spouse takes automatically) AND receives a full stepped-up basis on the entire property (both halves) at the first death—combining the best of both joint tenancy and community property.

Exam Tip: Property Ownership

Property ownership questions test the bundle of rights and different forms of ownership. Know the differences between joint tenancy, tenancy in common, and community property, including the right of survivorship.

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