Assuming that what you had here is a Joint Tenancy, yes the decedent's share/rights transfer to the surviving partners/owners. Thus the decedent's share is no longer part of his/her estate. As such there is no step-up on death and the basis for sale of the property is the acquisition basis ( all partners together ) plus cost of any improvements. So the sale of the property and gains taxation thereof would be the same is if the asset was owned only by the remaining partners. Gains would be taxed at Capital gain rate applicable for the sellers.
Any distribution of the proceeds from a sale would therefore be viewed as a gift from the current owners ( donor) to donee and not an inheritance from the decedent. The donors would have to recognize this by filing a form 706.
I am assuming here that there was no will / testament of the decedent naming this asset.
Does this answer your query
