Mom and Dad have lived in their home since 1972, both have since past. A few years back, mom files a Quit Claim Deed, adding us children as owners of the Home as Joint Tenants with rights of survivorship. We now want to sell what are the tax complications.
Thank you for your email and being a listener and sorry for your family’s loss.
I would love to come and see the home and offer my assistance as a Real Estate Broker to help you with your real estate needs. Being in the business for almost 30 years, I have handled many situations like this with family estates.
But to answer your question based on my knowledge…………
When a parent transfer of all ownership to the children, the parents deed the property to the child and the parents as joint tenants with rights of survivorship, then when the parents die, the child will inherit the property outside of probate and the child’s basis in the property will be the fair market value of the property at the parents’ death. This is referred to as a stepped-up basis. Property owned as joint tenants with a right of survivorship transfers outside of probate and the survivng owners automatically inherit the share of the deceased joint tenant. If the child then later sells the property, the capital gains owed will only be the extent of any appreciation in the property after the date of the parents’ death rather than paying capital gains on the amount equal to the fair market value at the date of sale over the amount of the parents’ original cost basis.