In 2001, Tammy bought a home with her parents for $300,000, (assuming Tammy has 1/3 ownership). The home was upgraded for new solar panels costing $30,000. Two years later, her father died and just last year, her mother passed away. Saddened, Tammy finally moved out in January of this year. She plans to rent out the home for $3,000 per month, and had already spent $7,000 painting the house, inside and outside.

Tammy called and wanted to let you know her new situation. Her real estate agent advised her that the home was worth $570,000 when her father died, and $450,000 when her mother died. Given the fact that Tammy lives in a community property state, as her CPA, how would you advise her?