Legal Question in Tax Law in Texas

Tax liability risk on jointly owned property

My sister and I are sole owners (deed free and clear) of

a residential property in Texas inherited by our

deceased parents. Property is currently being rented to

outside tenants and managed by a professional

property manager. My sister and I each receive

one-half equal portion of monthly rent proceeds and

share equally any and all expenses (including property

taxes) related to the property. We each receive an

annual 1099 form for our respective rent collections

(tied to each of our social security numbers). Question

is: If one person does not properly report her income

(or otherwise has any other problems with the IRS), can

the IRS place a lien on the rental property which would

jeapardize the OTHER owner's half interest, even

though the other person has been completely ''above

board'' with all of her IRS dealings and has retained a

clear standing with the law??


Asked on 2/07/03, 9:35 am

1 Answer from Attorneys
Lawrence Maun Lawrence J. Maun, P.C.

Re: Tax liability risk on jointly owned property

You and your sister most likely own the property as tenants in common, each owning an undivided 1/2 interest. If the IRS were to file a lien against one co tenant it would be against her undivided interest. However, it would cloud title on the whole of the land. While the interests could be divided in court, each tenant assigned specific half, a better way might be to sell the land and take your 1/2 proceeds, or agree to divide the land before the IRS lien, have the land surveyed, determine the value and divide it. Larry Maun 713.266.2560

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Answered on 2/07/03, 10:16 am


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