tax law regarding selling real estate as a surviving joint tenant

[loufurut]

Suppose I and my adult child or grandchild own a house together as joint tenants,

upon my passing,  does the child/grandchild have to pay inheritance tax if they

sell the house? I won't need to pay Estate tax because of the high limit.

Any step up or cost basis adjustment if the surviving tenant holds on to the house?

Thanks

[MariaDG]

Joint tenants enjoy right of survivorship. There would not be an inheritance tax on the portion of the house that belonged to you, and will now belong to your grandchild.   However, if you have not already entered into this arrangement there are things to consider.  If you add your grandchild to your home as a joint tenant, that constitutes making a gift to them of their portion of the value of the home. For 2022 the annual gift exclusion is $16000.  As it is likely that your home is worth more than $32000, you would be required to file a gift tax return, and use part of your lifetime estate and gift tax exemption to eliminate any tax on the gift.   
There would be a step up in basis on the portion of the asset that was inherited from you, but not on  your grandchild's original portion. This new basis would be used to calculate capital gains tax if your grandchild sold the home. 

[RSUMan]

The child would not pay Federal Estate Tax; your 50% value of the house would be in your estate; however, you have indicated that your estate will be below the exclusion, so no estate (inheritance) tax due.

The surviving tenant inherits your 50% of the house and gets a step up in basis equal to the fair market value of your 50% of the house.  For example, if house was purchased for $100,000 and is worth $200,000 years down the line at date of death.  Now, the basis of the asset in the hands of the surviving tenant is $150,000.