Legal Question in Real Estate Law in California

Re: Lawsuit & Partition Action

One correction to Mr. Whipple's otherwise flawless response. The property takes the basis of the fair market value at the time of the death of the prior owner and not when you actually get the property. For IRS purposes, if there is going to be a capital gain, you can argue that getting 1/4 of the property is not the dame as getting 1/4th of its fair market value on the date you actually sell it. Almost no one will buy a 1/4th interest in a piece of property so that decreases its potential sale price.

Re: Lawsuit & Partition Action

As to the tax question, this is not so much a law question as it is a tax-accounting question, but I can tell you some basic concepts. Your tax basis in inherited property is the fair market value of your share on the date of inheritance. I four of you inherited 1/4 each of a property worth $400,000 on that date, your basis would be $100,000, and if you got less in the partition, you'd have a capital loss, and if you got more, the difference would be a capital gain. There are nuances and adjustments, so get professional advice before filing a return.

As to what happens if your cousin flakes out, I'd say your settlement is probably enforceable under Code of Civil Procedure section 664.6, and you can probably petition or move the court to enter judgment on the settlement. Then, you marely (!) have an enforcement of judgment problem to deal with. Since you seem to be doing your own lawyer work with some success, you should have no problem with 664.6 or enforcement of the judgment when you get it, through levy and execution procedures.