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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Real Estate Law
Satisfied Customers: 118635
Experience:  Licensed attorney practicing landlord-tenant, land use and other real estate law and litigation.
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Here in California my siblings and I have inherited a

Customer Question

Here in California my siblings and I have inherited a residential property from our deceased Mother. The trust has not been settled yet. How can I buy out my four siblings, finance the property (less my share of the inheritance) and avoid a new tax base (so we remain under prop 13)? The property was originally purchased in 1978 and has an appraised value of $193k- but is currently priced at $775k. We have a cash offer right now for $765k. I can rent the property for around $3,000.
Seems worth doing as long as I can keep the taxes low.
Submitted: 2 years ago.
Category: Real Estate Law
Expert:  Law Educator, Esq. replied 2 years ago.

Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Under Prop 13, an interfamily transfer or inheritance is exempt from the tax increase, so upon purchasing the property interfamily or through inheritance, there is no increase or reassessment under Prop 13.

You have to settle the trust and as part of the settlement, you can make an offer of cash buyout to buy the shares of the other siblings from the trust. This would need to be done by the trust attorney, but if you do buy out their shares as this is an inheritance and interfamily transfer, you would not be subject to any reassessment for tax values.