[USER]

My parents are in their upper 70s and are thinking about what they are going to leave me and my 2 siblings. They have a paid off apartment building with three apartments that rent for about 1000 each.

My dad has suggested he should just sell it and give us the money instead of trying to figure out how to jointly own it. My guess is that it would sell for about $350,000 – 400,000.

What is the best financial decision for us? Have him sell or figure out the joint ownership.

We get along so that shouldn’t be an issue.

[Irina]

If you wait until your parents pass, you will get a step up basis on the value of the building.

You can sell it and divide it with your siblings without paying taxes on the appreciation.

If your parents sell it now, they will pay taxes on the appreciation over the years.

[Neil]

If they sell it, they will pay capital gains tax. It would be more tax advantageous for you to wait and then sell it after they pass.

This way, you’ll all inherit the building at the current value and pay no capital gains tax.

[Karen]

Do you want $18,000 a year or $200,000 “now”? Do you like the idea of ownership? Who’s going to be the party to maintain, collect rent, evict if necessary, organize cleaners/ painting, upgrades etc?

It’s a nice depreciating asset but I think the question is up to you.

[Author]

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