Parents and an adult child own a rental property
!) After husband (H) passed, wife(W) and child (C) each gets 50% of H's share oF FMV on date of death
example. original tax basis 100 each total 300
fmv on date of death of H of the entire property 600
H's share 200
so each gets 100 as new basis from H's share
so total basis now 400
200 W &C original basis + 200 from share inherited from H
2) A few years later, wife passed. Child gets 100% of the step up basis.
since now each own 50/50. C gets 100% of FMV of W's share
example FMV of entire property 800
C gets 400 as basis from W's share
and retains the 200 as basis in the share previously owned
there may be a better way. discuss with an attorney about putting the property into trust. this would also avoid the cost of probate for the property.
