DEAR BOB: I read with great interest your recent item about stepped-up basis on inherited property. My father-in-law recently passed away. My mother-in-law intends to stay in the house, which was built by her father in 1923. Should we at this time get an appraisal to establish her stepped-up basis due to my father-in-law’s passing? My mother-in-law’s will says when she dies the house will go to her three surviving children. Will there then be another new stepped-up basis? – Paul D.
DEAR PAUL: Presuming your late father-in-law and your mother-in-law both held title to the house, she should obtain evidence of the house’s current market value, such as an appraisal, to establish her new stepped-up basis.
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Depending on what state the house is located in, she either received a 50 percent stepped-up basis on the inherited half, or if it is in a community property state, a 100 percent stepped-up basis.
Establishing the new stepped-up basis for your mother-in-law could become very important if she decides to sell the house. She should also clear up the house’s title to take your late father-in-law’s name off the title.
When your mother-in-law dies, if she hasn’t sold her house, the three surviving children who inherit the house will then get a new stepped-up basis at the market value when she dies. For full details, she should consult her tax adviser or attorney.
NOISY GUN CLUB STIRS UP PROBLEMS
DEAR BOB: Your recent answer about that noisy gun club was way off base. Why didn’t the Realtor tell the home buyer about the nearby gun club before she bought the house? She obviously didn’t do her homework before purchasing. If the gun club has complied with state and local regulations, why should she sue because she doesn’t like guns? I suspect the noise element is minimal and the word “gun” provoked an emotional and irrational response – Tyrone S.
DEAR TYRONE: You are correct the home buyer’s real estate agent, if she had one, and the home seller should have informed the home buyer about the nearby noisy gun club shooting range.
If the buyer was a gun enthusiast, the gun club would have been a benefit, rather than a detriment, to own a home close to a shooting range.
But the point of the reply was to emphasize that just because a public nuisance has existed for a long time does not allow it to continue existing without abatement if it seriously disturbs a large number of neighbors. For more details, please consult a local real estate attorney.
HOW MUCH SHOULD REALTOR CHARGE FOR PRE-ARRANGED SALE?
DEAR BOB: When I let it be known I want to sell my house, an acquaintance said she would be interested in buying. After inspecting my home with her husband, she said they definitely want to buy. A few days later, they came back with papers prepared by their attorney for me to sign. However, not being familiar with all the current requirements, I asked for time to have somebody review the papers. When I phoned several Realtors who had been soliciting me for years to ask how much they would charge for such a pre-arranged sale, they all wanted the full sales commission. I felt this was outrageous since I already found the buyer and just want the agent to be sure everything is legal. I offered a 1 percent commission and was refused. How much should a Realtor charge to handle an easy sale like this? – Jerome H.
DEAR JEROME: Most realty agents don’t want to become involved in a sale such as you describe. The reason is the agent might incur full legal liability if something goes wrong. But they will have received only a minimal commission.
Instead, you should contact a local real estate attorney to review the documents presented by the prospective buyer. Most attorneys will charge an hourly fee, probably a few hundred dollars, for making certain your home sale is properly conducted.
The new Robert Bruss special report, “Secrets of Buying Your Home or Investment Property for Nothing Down,” is now available for $4 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet download at www.bobbruss.com. Questions for this column are welcome at either address.
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