There is an oak tree half on our lot and half on our neighbor's lot. They want to cut it down at their expense. But we like the tree because it provides shade for our lawn. The tree is completely healthy. Must we agree to let them chop it down?

Q: There is an oak tree half on our lot and half on our neighbor's lot. They want to cut it down at their expense. But we like the tree because it provides shade for our lawn. The tree is completely healthy. Must we agree to let them chop it down?

A: There is no clear answer to your question.

Your neighbors can remove their half of the tree, including the trunk, but if they kill the tree (as they likely would), you could then sue them for the loss of the value of the portion of the tree that you own.

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You would need to hire an attorney, file suit and endure what might be years of litigation, all over an oak tree. Relations with that neighbor would likely be awful from then on.

Consider asking your neighbors to trim the tree but not remove it entirely. Also, check to see if the community where you live has any tree rules or regulations. If you have a homeowners association, you should start there.

Q: My wife and I own a rental home (not our primary residence) that is worth $300,000. It has been fully depreciated for income tax purposes, so our basis is now zero. If we sell the house now, will we owe capital gains taxes? If so, over how much of the sales price? If I die and then my wife sells, would there by a step up in cost basis, and what portion of the sales price would be subject to capital gains tax? If we both die and give the home to our son using a Transfer on Death Deed, would he get a step up in cost basis? And if he sells the house, what portion would be subject to capital gains tax?

A: If you sell now, the full sales price will be subject to capital gains taxes, depreciation recapture and possibly net investment income tax. This can be a complicated calculation, and it is therefore best handled by an accountant. Of course, when selling fully depreciated real estate, you can lessen the impact of the depreciation with a 1031 exchange or an installment sale.

If you die and your wife then sells, her new cost basis in the entire property will be the full fair market value of the home at your date of death. Thus, there would be no capital gains taxes unless the home increases in value from the date of your death until the date she sells it. If your wife doesn't sell immediately, in the years after your death, the depreciation schedule would reset and be based on this higher value.

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If you and your wife both die and leave the house to your son using a Transfer on Death Deed, the tax result is the same as if you were to die and leave the home to your wife.

The information in this column is intended to provide a general understanding of the law, not legal advice. Ronald Lipman of the Houston law firm Lipman & Associates is board-certified in estate planning and probate law by the Texas Board of Legal Specialization. Email questions to: stateyourcase@lipmanpc.com.