Co-owning real estate?

[Ken]

People struggle to gift a property early or pass it down through inheritance. The stepped-up basis on inheritance can be a significant advantage, but estate taxes and capital gains still need to be considered.

The Federal estate tax threshold for 2025 is just shy of $14 million dollars ($13,990,000 to be exact).

[ohio jones]

People struggle to gift a property early or pass it down through inheritance. The stepped-up basis on inheritance can be a significant advantage, but estate taxes and capital gains still need to be considered.

The Federal estate tax threshold for 2025 is just shy of $14 million dollars ($13,990,000 to be exact).

Some states have thresholds that are significantly lower.

[Thomas_muntzer]

Just have all the contingencies planned for. This happened in my family.

My grandparents had a large tract of woodland with old cabins on the mountain above Belleville PA. When they died they left the property jointly to their 5 children, including my mother. The idea I suppose was to keep it in the family. Except that only one of the siblings even lived in PA at that point, the one who had taken over the family farm below. Who basically maintained the property and was the only one who used it with his kids for hunting and recreation.

Fast forward about 15 years. One sibling married into an abusive relationship and then died of a heart condition leaving behind an abusive husband that the family was estranged from and three children. They were living first in Chicago and then Florida. A second sibling and his wife died leaving a collection of children and grandchildren as heirs who were also in another state. The three surviving three siblings were alive and well, but only one lived in PA.

At this point the family thought the best solution would be to sell all the woodland and cabins to the one remaining PA sibling and his family as they were the only ones with any use for it and the ones who had been using and maintaining the property for two decades anyway. Except that the abusive surviving spouse of one of the dead siblings now living in Florida was now part owner of the property by inheritance, even though he apparently didn't even know it. And no one in the family wanted to approach him for fear he would be unreasonable. So the property sat unchanged for another decade.

Fast forward another decade and the abusive widowed spouse also finally died leaving 3 children (my first cousins). At that point there were maybe 10 people with various interests in the property. The 3 surviving siblings. The 3 children of one dead sibling. And the children and grandchildren of the other dead sibling. The family came up with a very reasonable but fair price for the land based on the going price per acre of woodland in the area and recognizing that only one sibling had been maintaining the property for decades. And they contacted and sent out letters to all the different heirs explaining the situation and that the family wanted to buy out their shares in the property. None of the grandchildren heirs even knew the property existed and luckily all of them agreed to take the windfall money and not fight the sale.

The whole mess took over 3 decades to resolve and lots of headache and all because my grandfather left a piece of property to his children jointly rather than just leave it to the one sibling who was actually going to use it and doing something else for the others.

This is a story with a happy ending i know about similar stories with relatives fighting over who should pay property taxes and finally the property going to auction over a ridiculous debt