by Nathan B. Hannah
When two or more people buy real estate together, they usually do it in such a way that
there is a prearranged method for un-doing the ownership, at least in some circumstances.
The most common example is when two people buy real estate as joint tenants with right
of survivorship. If one of the joint owners dies, the other becomes the sole owner of the
Another example of a prearranged method for multiple individuals to own real estate is to
use a limited liability company. A limited liability company will almost always have an
operating agreement. That’s a contract among the owners that spells out, among other
things, how to unwind the company and separate the interests of the owners.
Sometimes, however, individuals will acquire real estate without any predetermined
arrangement for separating their interests. If two or more individuals take ownership of
property without a right of survivorship and without a structure like a limited liability
company, that’s called a tenancy in common, and the owners are referred to as tenants in
In a tenancy in common, also called a co-tenancy or co-ownership, each of the owners
owns a fraction or percentage of the property. If one of the owners dies in a co-
ownership, the deceased owner’s share of the property does not automatically go to the
other owners as in a joint tenancy. Similarly, if one owner wants to sell his or her interest
in the property, that owner isn’t obligated to sell to the other owners, unlike what would
usually happen in a limited liability company.
If we’re talking about vacant land owned by co-owners, it’s not that big of a problem if
one of the owners dies or wants to sell. If one of the owners dies, the beneficiaries of that
owner’s estate take ownership of the share. If one of the owners wants to sell his or her
share, the share can be sold to any willing buyer. As a last resort, it may be possible to
split the land into as many separate pieces as there are co-owners.
But what if we’re talking about a house owned and occupied by two individuals as co-
owners? Now it gets more complicated if one of the owners dies or wants to end the co-
ownership. You can’t split a house into two pieces. And the other owner is probably not
going to want to have a stranger take over ownership of the other half of the house and
There are legal mechanisms for undoing a co-ownership if the parties can’t agree on how
to undo it. Like most legal processes, however, the legal process for dividing a co-
ownership, called partition, is not fast, and it’s not cheap.
The point of this discussion is to illustrate some of the potential pitfalls of entering into a
co-ownership. In my opinion, if you are going to buy property in a co-ownership, you
should have a good reason for doing so, and, more importantly, have a predetermined
arrangement for undoing the co-ownership.
What’s the solution if you have a good reason for entering into a co-ownership, but a
legal structure like a limited liability company doesn’t make sense? The solution is a co-
A co-ownership agreement is a contract between the co-owners that spells out what will
happen if the owners want to split up, or if one of them dies. The co-ownership
agreement can also define how to handle other questions or problems that can arise, such
as how to divide operating expenses, how to divide outlays for repairs and maintenance,
and how to finance making improvements to the property.
You might think the potential pitfalls of a co-ownership seem unlikely, and therefore a
co-ownership agreement sounds unnecessary, but believe me when I tell you that I have
dealt with many situations where individuals have found themselves in co-ownerships
that had to be ended, and undoing the co-ownership was messy. Ending those co-
ownerships would have been far easier if the owners had made an agreement in advance
that defined how to go about it.
A co-ownership agreement doesn’t have to be complicated, and it can save a lot of time
and expense if the co-ownership has to be ended unexpectedly. I always encourage using
other forms of ownership when possible, but if you are going to be in a co-ownership, a
co-ownership agreement is the preferred way to do it.
WHY DOES THE RECEIPT FOR MY CHARITABLE DONATION SAY
“NO GOODS OR SERVICES WERE PROVIDED” TO ME
IN EXCHANGE FOR MY DONATION?
Because Congress said if the receipt doesn’t say that, then the donation does not qualify
as a tax-deductible charitable contribution. In tax lingo, the receipt is a “contemporaneous
written acknowledgment.” For any contribution of $250 or more, the tax code requires
that the taxpayer obtain a “contemporaneous written acknowledgement” from the
organization that received the donation, The contemporaneous written acknowledgment
must include (1) the amount of cash and a description of any property other than cash that
was contributed; (2) whether the organization provided any goods or services in
consideration, in whole or in part, for any such property; and (3) a description and good
faith estimate of the value of any goods or services provided in consideration for the
The importance of following that rule was illustrated in a recent United States Tax Court
case, Albrecht v. Commissioner, decided May 25, 2022. Mrs. Albrecht gave
approximately 120 items of Native American jewelry and artifacts to a museum, and
claimed a substantial deduction on her income tax return for that charitable contribution.
The court ruled that because the contemporaneous written acknowledgment that the
museum provided to Mrs. Albrecht did not say whether or not the museum provided any
goods or services with respect to her donation, she was not entitled to a charitable
contribution deduction for that donation.
Now you know why those receipts you get from charities when you make a donation
always say “no goods or services were provided.” If you get a receipt that doesn’t say
that, tell the charity they have to add it or you won’t be able to claim the charitable
Nathan B. Hannah is a Shareholder in the Tucson office, and practices in the areas of estate planning and administration, real estate, and commercial transactions. He is also a noted blogger, and you can find more of his articles on his private blog,
Contact Attorney Hannah: firstname.lastname@example.org or 520/ 322-5000
This communication is designed to bring legal developments of interest to the attention of our clients and others. It should not be relied upon as a substitute for specific legal advice in a particular matter. For further information on any of the subjects discussed, or for legal advice in connection with any particular matter, please contact us.