@Becca F.
Just chiming in with a couple of thoughts. Prop 19 did drastically change the property tax landscape for transfers of real property between parents and children after 2/15/2021.
If considering adding a child to title now, you are correct that there are other considerations. For one, depending on how it is done, it could be a change in ownership that causes a reassessment for property taxes now upon adding child to title. There are also gift tax considerations, estate tax considerations, and income tax considerations.
Some irrevocable trusts, depending on the type of trust and how it is structured, may avoid reassessment upon transfer of property into the trust, but likely not avoiding reassessment entirely or forever unless properly qualifying for some exclusion.
There may be some strategies to be used with LLCs or business entities to help avoid, or at least drastically reduce, property tax reassessments, but such strategies require time, attention to detail, and can be inherently a little riskier. Any strategies making use of LLCs should be done in strict consultation with a competent advisor.
Be sure to make all of these considerations in conjunction with an estate planning attorney to ensure that all plans meet with the overall plan of wealth and asset transfers.
As to the $1 million exclusion, I think your calculation is slightly incorrect in how it is structured, but does appear to probably arrive at the correct conclusion. I think generally only $1 million above the assessed value can be excluded, and anything above that is added to the base assessed value. So the calculation would probably actually be something more like base assessed value $275k plus $1 million extra = $1,275,000 max value that can be carried from parent to child avoiding reassessment, and anything above that ($1,400,000 - 1,275,000) is added to the base $275k that gets ported over. Either way I think you arrive at the same $400k assessed value in your example, but I believe the formula is slightly different. Note that the $1 million value is adjusted for inflation and was recently increased a little higher.
If the child does move into the parent's primary residence as his/her own residence, be careful to meet all the rules to properly qualify for the exclusion including the time for doing so, filing the correct application forms timely, meeting requirements for primary residence, no buyouts among siblings, considering the homeowner's exemption on other real properties owned by the child, how long the child needs to reside there as a primary residence, etc.
*This post does not create an attorney-client or CPA-client relationship. The information contained in this post is not to be relied upon. Readers are advised to seek professional advice.