In 2005, Mandy and Hal (mother and son) purchased land for $600,000 as joint tenants with right of survivorship. Of the $600,000 purchase price, Mandy provided $300,000 and Hal $300,000 (of which $200,000 had been received as a gift from Mandy). In 2016, Hal dies first when the land is worth $3,000,000. As to the land, Hal's gross estate must include:

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The land was purchased for $600,000, with Mandy providing $300,000 and Hal providing $300,000 (of which $200,000 was a gift from Mandy). Therefore, Mandy's basis in the land is $300,000 and Hal's basis is $100,000. When Hal dies in 2016, the land is worth $3,000,000. Hal's gross estate must include the value of his interest in the land, which is $1,500,000 (1/2 of $3,000,000).

In 2005, Mandy and Hal (Mother and Son) Purchased Land