Not quite sure what they mean by Market Value in regard to transferring Prop 13. Sold our house for $620,000, buying a new property for $610...

Question

Not quite sure what they mean by Market Value in regard to transferring Prop 13. Sold our house for $620,000, buying a new property for $610,000

Answer

Market value is the price at which a willing buyer and a willing seller will conclude a sale, in an arms length transaction, and in the absence of fraud, undue influence, duress or other factors that would prevent either party from exercising free and reasonable judgement. For Prop. 13 purposes, the sales price of a property at close of escrow is presumed to be the market value in most real estate transactions.

Answer

You also have to look at what the basis is for the property you sold as you may want to exercise your $250,000 exclusion of the profit on sale of your house as the new home will have a basis of $610,000 based upon the purchase price.