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Updated 10 months ago, 02/11/2024
Inheriting house w/ CA prop 13 - need estate tax CPA/advice
My siblings and I stand to inherit our father's house in Santa Clara County, CA. The only asset to be inherited from my father is his house which was purchased in the early 70's and has very low property tax due to prop 13. I am currently living in the house along with my father. The house is in a Trust and will be evenly split between me and my 2 siblings. Our goal is for me to buyout my siblings and to own the house myself while maintaining as much of the prop 13 tax basis as possible. We've been working with an estate lawyer and they haven't been very helpful. Their only recommendation was to add verbiage to the trust that I have the right of first refusal to purchase the house from my siblings with the intent of inheriting my fathers property tax basis. They said it may or may not work depending on which assessor oversees our case.
I discussed this with a friend recently and he mentioned I have more details to figure out. Such as how to handle the capital gains on the house (which would be substantial). He said I can have the house reassessed at the fair market value and defer the capital gains (but have a large increase in property tax). Or I can attempt to keep my dad's original property tax basis (but have a large capital gains tax bill). He also mentioned prop 19 and how that complicates the situation. He suggested I contact a CPA that specializes in estate taxes. He also suggested I find a CPA in my county as each county assessors tend to interpret prop 13/19 slightly different and I would need to cater the verbiage of the Trust to my county's assessors.
I am currently unclear on what my best course of action would be to be able to purchase my dad's house from my siblings upon his passing. Does anyone have a recommendation on a CPA specializing in estate taxes? I looked around on the forums and I couldn't find any in my county. Most seem to be down in southern CA or out of state. Also, I'd appreciate any advice anyone could provide. I really appreciate this community and have learned a lot. I just can't figure out what is best for my specific situation.