In 2016, Roger gives stock valued at $100,000 to Martha. Roger and Martha are not related. In 2018, 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 will include the portion of the realty that was purchased using her own funds or property. In this case, Martha contributed stock valued at $110,000 towards the purchase of the realty. Therefore, $150,000 of the realty's value (half of $300,000) will be included in Martha's estate. The fact that the realty was titled as joint tenants with right of survivorship is irrelevant for estate tax purposes, as it only affects who owns the property after Martha's death.

In 2016, Roger Gives Stock Valued at $100,000 to Martha