Hello! I am considering co-purchasing a home with my mother and want to know if the current inheritance property tax law that was voted in this year in California (saying if you inherit property, you inherit the property at current market values and pay property taxes based upon that value) would apply in this situation? IE, if my mother passes, would I be considered to "inherit" the property and therefore would I need to pay the higher property tax? Anyone out there have any idea?
Hi Sasha - this is a great question for your tax accountant. For example, you might be able to "inherit" half the value. It also depends on if it'll be a primary residence vs a rental. And the legal structure matters. A joint member LLC is treated differently because you're "inheriting" half a business, which owns the asset. Your short/long terms plan with the property also matters (flip vs buy & hold vs...). And there are probably other considerations I'm not even thinking of! :) An accountant will know best for your specific situation. My experience has been they'll give you an answer with a quick phone call or email. Good luck!
Yes, you should consult an accountant but I would be greatly surprised if the law were written in a way as to reach joint holders of property. As a general rule, property held in a joint tenancy does not go through probate; the joint tenant assumes the other tenant's interest upon the other tenant's death. This is true of bank and brokerage accounts as well. Make sure you hold title as joint tenants rather than as tenants in common and yes get a formal legal opinion to be sure you are doing it right.