Press Room: Article
Appraisal Considerations for Undivided Interests in Real Property
Fractional (or undivided) interests in real property are common subjects of estate and gift planning.
Since they are typically transferred at a value that incorporates a discount from a pro-rata share of the property’s total value to reflect a lack of control and marketability, these transactions are often challenged by Internal Revenue Service (IRS), as evidenced by the recent Ludwick1 case. This article discusses the steps that should be taken when planning to transfer undivided interests as part of any estate or gift planning program.