My grandmother died almost 25 years ago. Her estate was split evenly between her two children, my mother and aunt. However, since the aunt had died, that 50% went to the one grandchild, my cousin, on that side of the family. There was some undeveloped land as part of the estate, which then was jointly owned by my mother and my cousin. My mother has now passed away, and her portion of the land is now being passed on to multiple children. So, the land is now half owned by one person, and half owned by 6 people. At first it seemed the correct thing for estate valuation was to just take the county tax value of the property. However, I've been reading enough here to understand that the land is considered encumbered to the estate due to the half ownership of the cousin. It would be very difficult to sell this land to developers, as he would prefer that it stay in the family and either left alone, next to a family house, or another house put on it for a family member. So, instead of what the value of the land is to condo developers, we're limited to a smaller price. In the 25 years that my cousin and mother jointly owned the property, they were not able to get it settled. (Not that they worked real hard at it, but the fact remains that the land is 1/2 owned by someone who would prefer not to sell). As such, I believe I have a legitimate argument that the land is encumbered at this point and the value of the land should be reduced for estate valuation. Having said all that, my question is, how do you quantify the encumbrance and come up with a value for the land? Obviously I'd like to say the land is nearly worthless and not pay taxes on it. I can see where that wouldn't fly with the IRS. But I truly believe it isn't worth as much as the appraisal due to the difficulty in selling it. Any help out there? Thanks.
- posted
16 years ago