In 2006, Roger gives stock valued at $100,000 to Martha. Roger and Martha are not related. In 2008, Martha uses the stock then valued at $110,000 as partial consideration to acquire realty costing $220,000. Pat (her brother) furnishes the remaining $110,000 of consideration. The realty is titled in the names of Martha and Pat as joint tenants with right of survivorship. This year, Martha dies and Pat survives. The realty is valued at $300,000 at Martha's death. How much, if any, of the realty's value will be included in Martha's estate?

Question

Quizplus · Accepted Answer

Martha's estate includes the value of all assets she owned or had an interest in at the time of her death, including her share of the realty she acquired with the stock gift from Roger. Since Martha gave the stock to Pat as partial consideration for the realty, her ownership interest in the realty is determined by the portion of the purchase price that she provided.

Martha's contribution to the purchase price was the value of the stock at the time of the purchase, which was $110,000. Therefore, Martha's ownership interest in the realty was $110,000, and this amount will be included in her estate.

The fact that the realty was held in joint tenancy with right of survivorship is not relevant for determining the value of Martha's ownership interest in the property at the time of her death. Joint tenancy only affects the way the property passes after death – in this case, the property passes entirely to Pat as the surviving joint tenant, without going through Martha's probate estate.

In 2006, Roger Gives Stock Valued at $100,000 to Martha