My daughter's, husband's grandparents died in 2015 and 2016. His mother inherited their home after the estate was probated in Maryland. The deed was transferred to her name in 2017 and we just found out that she at the same time added my son-in-law on the deed as joint owner with right of survivorship. We are concerned that she got some bad advice since the home's value in 2016 was approximately $450,000 and it is now in 2023 approximately $700,000. Are we correct in that when the MIL dies that my son-in-law's cost basis will be the same as when his mother inherited the house at $450,000? Then when he goes to sell the house will he owe capital gains taxes on the difference between the value at her death and his cost basis of $450,000? How can my daughter and son-in-law avoid this so that he would get a step up in basis when his mother dies?
