Four years ago, David gave land to Mike that he purchased for $70,000, which is presently worth $100,000. Three years ago, Mike exchanged the land (then worth $150,000) along with a $100,000 cash contribution made by David for a new piece of land worth $250,000. The new land is titled with David and Mike as joint tenants with the right of survivorship. When Mike dies this year, the land is worth $300,000. Mike's estate will include

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Upon exchanging the original land for the new land, Mike received $100,000 in cash from David. This contribution made by David can be seen as a gift to Mike. However, since the new land is titled with both David and Mike as joint tenants with the right of survivorship, the contribution made by David is considered to be a gift to the joint tenancy and not a gift to Mike individually. Therefore, the $100,000 contribution made by David does not increase the value of Mike's estate. Since the new land is titled with David and Mike as joint tenants with the right of survivorship, upon Mike's death, David will automatically inherit the entire property and there will be no assets in Mike's estate.

Four Years Ago, David Gave Land to Mike That He