In 2005,Thalia purchases land for $900,000 and lists title in the names of her daughters as follows: "April and Theresa,joint tenants with right of survivorship." In 2007,April and Theresa purchase an apartment building for $1 million as equal tenants in common;April furnished $400,000 and Theresa furnished $600,000 of the cost.April dies first in 2015 when the land is worth $1.5 million and the apartment building is worth $2 million.One of the results of these transactions is:

Question

Quizplus · Accepted Answer

When Thalia purchased the land in 2005 and listed title in the names of her daughters as joint tenants with right of survivorship, she made a completed gift to them. Therefore, the value of the land is not included in April's gross estate when she dies.

However, when April and Theresa purchased the apartment building in 2007 as equal tenants in common, April's share of the building at the time of her death is included in her gross estate. Her share would be based on the amount she contributed to the purchase price, which is $400,000 out of the total $1 million. Therefore, her gross estate includes $800,000 (40% of the $2 million value at the time of her death) as to the apartment building. Combined with the value of the land, which is not included in her gross estate, her gross estate includes a total of $1,750,000.

In 2005,Thalia Purchases Land for $900,000 and Lists Title in the Names