How to determine step up of shared asset?


Admiral Comodore

I need to understand how the stepped-up value of a home is
determined upon the death of one of the co-owners.

Suppose a condo is owned JTWROS by by an unmarried couple
Sam and Sue. The property is in Michigan, which is where
Sam lives (Sam lives in the condo); Sue lives in South
Carolina. Original price was 200K in August 2004, and each
contributed 100K in cash. Sam dies in February 2005.

My understanding is that Sue now owns the condo outright.
In addition, her cost basis is increased since the half that
was previously Sam's has been stepped up in value. So,
assuming that the value of the house was 220K upon death,
Sue's new basis would be 100K (Sue's half) + 110K (Sam's
half) = 210K. Correct?

My question is: How does Sue determine the value upon death,
in such a way that it will satisfy any official request?
Can she simply ask a real estate agent for their written
opinion? Or rather does this require some sort of
official appraisal? If so, what credentials would be
required of the appraiser?

Thanks in advance for any help.


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