Ed, Please ship this junk before posrting

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"D. Stussy" <spam[at]bde-arc.ampr.org> wrote:
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Partition can mean physically dividing a parcel of property and
giving each owner his own portion.

But if a physical division is not practical, partition means selling
the whole property as a unit, and dividing the sale proceeds. In a
family limited partnership or similar situation, the parties waive
their right to partition. But without that waiver, partition is
generally an absolute right.

In this case OP may have the right to go into court and have the
property sold to the highest bidder. If so, there is no blockage, he
is entitled to get full value for his share, so there should be no
blockage discount.

On a quick glance at the cases, I haven't seen any where this precise
issue came up. But the minority discount is normally given because
someone has only the legal right to sell his own interest, and that
if it's a minority interest he won't get full value. The difference
is that when partition is not precluded, the minority owner may have
the right to have the whole property sold, not just his share.

Stu

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"Stuart Bronstein" <spamtrap[at]lexregia.com> wrote in message
news:Xns9A3BA27A6D2F9avocatstuyahoofr[at]130.133.1.4...
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Yes, but the cousin got his step-up when he inherited his half from his
parent. He's not entitled to a step-up when his aunt dies of which he
receives NO share.

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True, but it's the closest thing we have to the situation that's easy to
find case law on. It is a family partnership with one 1/2, and six 1/12ths.

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That assumes that it can be further partitioned. We'd need to know the size
of the parcel....

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"D. Stussy" <spam[at]bde-arc.ampr.org> wrote:

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There's a stepped up basis on any inherited property. Community
property going to a spouse allows a double stepped up basis, but not
the only one.

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The only problem I see with the discount is that in family limited
partnerships the other owners have no right to have their property sold
as a unit - it's in the partnership agreement.

But absent an agreement, an owner (especially of real property) has the
right to partition - to have the entire property sold as a unit, and be
paid off in full. If I worked for the IRS I'd deny a blockage discount
in this kind of case, because there's really no blockage from a legal
standpoint.

Stu

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"ed" <edcosoft[at]sbcglobal.net> wrote in message
news:818d6124-c5b0-4063-8068-994e38da8b4d[at]l1g2000hsa.googlegroups.com...
- quote -

Why would the cousin's half receive a basis step-up? I see no community
property nor surviving spouse issue here.

Any good appraiser will first compute the 100% valuation before figuring out
the discount value for any "complications" on the property. That helps to
cap the IRS should they challenge the discount (in that if they wish to
exceed the 100% appraised amount, then they have a second issue of
challenging the appraisal also).

For how to determine the discount, look for "family limited partnership
(FLP)" case law.

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On Feb 5, 8:28*am, Drew.Bl...[at]itg-global.com wrote:
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for what purpose are you asking? Your mother's Federal Estate Value
(now your childrens' tax basis) was established at her date of death.
Unless her estate is subject to FET tax you would want this appraisal
value to be as HIGH as possible.. If her estate is subjects to FET
you'd want it as LOW as possible. Hopefully you sttll have time to
juggle it on her FET return.. Your cousins' 1/2 is valued at their
mother's date of death value 25 years ago, but will step-up when she
dies. All this is wrong if the house is in a trust that does not
vest on subsequent deaths.

There are appraisal firms that specaliize in estate valuations of
property whose value is less than normal. Their valuation can be
quite a pleasant shock

ed.
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My grandmother died almost 25 years ago. Her estate was split evenly
between her two children, my mother and aunt. However, since the aunt
had died, that 50% went to the one grandchild, my cousin, on that
side of the family. There was some undeveloped land as part of the
estate, which then was jointly owned by my mother and my cousin. My
mother has now passed away, and her portion of the land is now being
passed on to multiple children. So, the land is now half owned by one
person, and half owned by 6 people. At first it seemed the correct
thing for estate valuation was to just take the county tax value of
the property. However, I've been reading enough here to understand
that the land is considered encumbered to the estate due to the half
ownership of the cousin. It would be very difficult to sell this land
to developers, as he would prefer that it stay in the family and
either left alone, next to a family house, or another house put on it
for a family member. So, instead of what the value of the land is to
condo developers, we're limited to a smaller price. In the 25 years
that my cousin and mother jointly owned the property, they were not
able to get it settled. (Not that they worked real hard at it, but the
fact remains that the land is 1/2 owned by someone who would prefer
not to sell). As such, I believe I have a legitimate argument that
the land is encumbered at this point and the value of the land should
be reduced for estate valuation. Having said all that, my question
is, how do you quantify the encumbrance and come up with a value for
the land? Obviously I'd like to say the land is nearly worthless and
not pay taxes on it. I can see where that wouldn't fly with the IRS.
But I truly believe it isn't worth as much as the appraisal due to the
difficulty in selling it. Any help out there? Thanks.

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