I would hope your estate lawyer would have protected you from the situation you described below. Economically, it seems to me that the estate should consider the two parcels as having a combined MV = $1 million and a combined basis of $600 thousand. An equitable outcome should have kid end up with a house having a basis of $300. Whether such an outcome could be constructed by the terms of a trust or will is something beyond my expertise, but that’s my take on what would be appropriate – for what it’s worth.