Can sibling force sale of inherited real estate?

DEAR BOB: My mother died about two years ago. Her will lefteverything to my sister and me equally. I was living with my mom when she diedof cancer, so my sister has allowed me to live in the house if I pay theproperty taxes and insurance. There is no mortgage. The house is worth around$400,000. Now my sister thinks we should sell the house, but I don’t want tosell, as I am very satisfied with the status quo. Can my sister force me tosell? –Naomi N.

DEAR NAOMI: Yes. As a co-owner, your sister can bring apartition lawsuit to force the sale of the house. In most partition lawsuits,the judge orders the property sold with the sales proceeds divided among thetitleholders.

Purchase Bob Bruss reports online.

It is extremely difficult to defend a partition lawsuitunless there are extraordinary circumstances. To save litigation costs, you andyour sister could enter into an agreement to sell the property and divide thenet proceeds, thus saving court attorney fees.

NO INHERITANCE IF DECEASED SPOUSE DIDN’T HOLD TITLE TO HOME

DEAR BOB: My wife died last year. Under the terms of herwill, I inherited all her assets, including the house. I just presumed as thesole heir I would receive a new “stepped-up basis” to market value,as you often discuss. However, when I recently consulted my tax adviser aboutselling the house, she says that because title to the house was held in my namealone, I didn’t receive any stepped-up basis and am stuck with our low $47,000purchase price many years ago. Is this true? –Marv W.

DEAR MARV: From your description, your tax adviser appearsto be correct. If the title to the home was held in your name alone, when yourwife died last year, you didn’t inherit anything so you didn’t receive a newpartial or full stepped-up basis to market value. Your tax adviser appears tobe correct.

NO TAX-DEFERRED EXCHANGE OF U.S. TO FOREIGN REAL ESTATE

DEAR BOB: Due to a semi-permanent overseas job transfer andbig promotion, we decided to sell our apartment building here in the UnitedStates at a substantial profit. Our plan was to buy a similar rental buildingnear London. But our tax adviser said we can’t make a tax-deferred exchange ofa U.S. rental property for a foreign rental property. If Uncle Sam taxes ouroverseas earnings, why can’t we make such a tax-deferred exchange? –Richard R.

DEAR RICHARD: I don’t make the tax laws. If I did,everything would be fair and just.

Although I am told it is possible to make an InternalRevenue Code 1031 tax-deferred exchange of a foreign rental or businessproperty for another qualifying foreign property, under current tax law it isnot possible to make an IRC 1031 tax-deferred exchange of a U.S. rentalproperty for a qualifying foreign rental property, or vice versa. Your taxadviser appears to be correct.

The new Robert Bruss special report, “How to Obtain theBest Appraisal of Your House or Condo,” is now available for $5 fromRobert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this columnare welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

Copyright 2006 Inman News

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