• Estate Tax Net Exclusion

    From D L@21:1/5 to All on Thu Jul 29 15:43:34 2021
    If there are three joint owners of real estate and one of the dies, does the property get excluded from the gross estate since it was jointly owned by three owners? Thanks.

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  • From Taxed and Spent@21:1/5 to D L on Thu Jul 29 20:09:40 2021
    On 7/29/2021 12:43 PM, D L wrote:
    If there are three joint owners of real estate and one of the dies, does the property get excluded from the gross estate since it was jointly owned by three owners? Thanks.



    No. But I like your thinking!

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  • From Stan Brown@21:1/5 to Taxed and Spent on Thu Jul 29 20:44:33 2021
    On Thu, 29 Jul 2021 20:09:40 EDT, Taxed and Spent wrote:

    On 7/29/2021 12:43 PM, D L wrote:
    If there are three joint owners of real estate and one of the
    dies, does the property get excluded from the gross estate since
    it was jointly owned by three owners? Thanks.>

    No. But I like your thinking!

    Wouldn't that depend on the exact nature of the holding? As I
    understand it, though I could be wrong, "joint tenants with right of survivorship" does exclude the house from the decedent's estate.

    --
    Stan Brown, Tehachapi, California, USA https://BrownMath.com/
    https://OakRoadSystems.com/
    Shikata ga nai...

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  • From Stuart O. Bronstein@21:1/5 to D L on Thu Jul 29 20:49:42 2021
    D L <debbie.lafourche@gmail.com> wrote:

    If there are three joint owners of real estate and one of the
    dies, does the property get excluded from the gross estate since
    it was jointly owned by three owners? Thanks.

    If you're talking about estate tax (and remember there's a lifetimes gift/estate tax exemption of $11,700,000 for people who die this year),
    the rule is this: the first joint owner to die is presumed to be the
    owner of 100% of the jointly owned property, so it's all included in
    his estate, except to the extent that the other joint tenant(s) can
    show that they contributed to the purchase.

    So, for example, if the property was worth $1 million on the date of
    death, that's all included in the estate of the first to die, unless
    the others prove that they contributed to the purchase. If they can
    show that they paid for half the purchase price, then only half the
    value is included in the gross estate.

    --
    Stu
    http://DownToEarthLawyer.com

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  • From Stuart O. Bronstein@21:1/5 to Stan Brown on Thu Jul 29 20:54:30 2021
    Stan Brown <the_stan_brown@fastmail.fm> wrote:
    Taxed and Spent wrote:
    D L wrote:

    If there are three joint owners of real estate and one of the
    dies, does the property get excluded from the gross estate since
    it was jointly owned by three owners? Thanks.>

    No. But I like your thinking!

    Wouldn't that depend on the exact nature of the holding? As I
    understand it, though I could be wrong, "joint tenants with right
    of
    survivorship" does exclude the house from the decedent's estate.

    Actually it's the opposite. As I wrote elsewhere in response to this
    question, the entire value of the property is included in the estate
    of the first joint tenant to die, unless the other joint tenant(s)
    can show that they actually contributed to the purchase. If they
    did, then the amount included in the estate would be based on the
    percentage the decedent paid toward the purchase.


    --
    Stu
    http://DownToEarthLawyer.com

    --
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  • From Taxed and Spent@21:1/5 to Stuart O. Bronstein on Thu Jul 29 22:04:01 2021
    On 7/29/2021 5:49 PM, Stuart O. Bronstein wrote:
    D L <debbie.lafourche@gmail.com> wrote:

    If there are three joint owners of real estate and one of the
    dies, does the property get excluded from the gross estate since
    it was jointly owned by three owners? Thanks.

    If you're talking about estate tax (and remember there's a lifetimes gift/estate tax exemption of $11,700,000 for people who die this year),
    the rule is this: the first joint owner to die is presumed to be the
    owner of 100% of the jointly owned property, so it's all included in
    his estate, except to the extent that the other joint tenant(s) can
    show that they contributed to the purchase.

    So, for example, if the property was worth $1 million on the date of
    death, that's all included in the estate of the first to die, unless
    the others prove that they contributed to the purchase. If they can
    show that they paid for half the purchase price, then only half the
    value is included in the gross estate.



    Just to clarify a bit for anyone reading:

    OP said "joint owners". That may or may not mean held as "joint tenants
    with right of survivorship".

    Stuart's replies pertain to the case where the property is held as joint tenants with right of survivorship.

    If OP meant, by "joint owners"m that the property was held as tenants in common, then the decedent's value in the property is included in
    decedent's estate. Decedent's value may be less than his proportionate
    share of the value of the property as a whole, due to partnership
    discount valuation.

    --
    << ------------------------------------------------------- >>
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    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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  • From D L@21:1/5 to Taxed and Spent on Fri Jul 30 01:05:22 2021
    On Thursday, July 29, 2021 at 7:08:18 PM UTC-7, Taxed and Spent wrote:
    On 7/29/2021 5:49 PM, Stuart O. Bronstein wrote:
    D L <debbie.l...@gmail.com> wrote:

    If there are three joint owners of real estate and one of the
    dies, does the property get excluded from the gross estate since
    it was jointly owned by three owners? Thanks.

    If you're talking about estate tax (and remember there's a lifetimes gift/estate tax exemption of $11,700,000 for people who die this year),
    the rule is this: the first joint owner to die is presumed to be the
    owner of 100% of the jointly owned property, so it's all included in
    his estate, except to the extent that the other joint tenant(s) can
    show that they contributed to the purchase.

    So, for example, if the property was worth $1 million on the date of
    death, that's all included in the estate of the first to die, unless
    the others prove that they contributed to the purchase. If they can
    show that they paid for half the purchase price, then only half the
    value is included in the gross estate.

    Just to clarify a bit for anyone reading:

    OP said "joint owners". That may or may not mean held as "joint tenants
    with right of survivorship".

    Stuart's replies pertain to the case where the property is held as joint tenants with right of survivorship.

    If OP meant, by "joint owners"m that the property was held as tenants in common, then the decedent's value in the property is included in
    decedent's estate. Decedent's value may be less than his proportionate
    share of the value of the property as a whole, due to partnership
    discount valuation.

    To clarify, property is held as Joint Tenants with Right of Survivorship. If property is held in Joint Tenancy, it moves out of the estate upon death of the person who died. It stands to reason that it should be excluded from the gross estate of the
    deceased.

    --
    << ------------------------------------------------------- >>
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    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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  • From Stuart O. Bronstein@21:1/5 to D L on Fri Jul 30 01:34:29 2021
    D L <debbie.lafourche@gmail.com> wrote:

    To clarify, property is held as Joint Tenants with Right of
    Survivorship. If property is held in Joint Tenancy, it moves out
    of the estate upon death of the person who died. It stands to
    reason that it should be excluded from the gross estate of the
    deceased.

    What's in or out of the probate estate is purely a state law issue and
    has nothing to do with federal taxes. You're right, though, that in
    many cases when someone has rights in property that terminate on his
    death, it is not included in his gross estate. These are referred teo
    as "terminable interests." However joint tenancy is not considered a terminable interest, though it certainly looks like one.

    --
    Stu
    http://DownToEarthLawyer.com

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
    << Copyright (2011) - All rights reserved. >>
    << ------------------------------------------------------- >>

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  • From D L@21:1/5 to Stuart O. Bronstein on Fri Jul 30 11:50:21 2021
    On Thursday, July 29, 2021 at 10:38:32 PM UTC-7, Stuart O. Bronstein wrote:
    D L <debbie.l...@gmail.com> wrote:

    To clarify, property is held as Joint Tenants with Right of
    Survivorship. If property is held in Joint Tenancy, it moves out
    of the estate upon death of the person who died. It stands to
    reason that it should be excluded from the gross estate of the
    deceased.
    What's in or out of the probate estate is purely a state law issue and
    has nothing to do with federal taxes. You're right, though, that in
    many cases when someone has rights in property that terminate on his
    death, it is not included in his gross estate. These are referred teo
    as "terminable interests." However joint tenancy is not considered a terminable interest, though it certainly looks like one.

    --
    Stu
    http://DownToEarthLawyer.com

    Stu, I was wondering if there is a list of excluded assets from the gross estate. Your point that state laws may come into play is an interesting point which I have not considered yet.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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  • From Stuart O. Bronstein@21:1/5 to D L on Fri Jul 30 12:27:35 2021
    D L <debbie.lafourche@gmail.com> wrote:
    Stuart O. Bronstein wrote:

    What's in or out of the probate estate is purely a state law
    issue and has nothing to do with federal taxes. You're right,
    though, that in many cases when someone has rights in property
    that terminate on his death, it is not included in his gross
    estate. These are referred teo as "terminable interests." However
    joint tenancy is not considered a terminable interest, though it
    certainly looks like one.

    Stu, I was wondering if there is a list of excluded assets from
    the gross estate. Your point that state laws may come into play is
    an interesting point which I have not considered yet.

    The rules of what is included or excluded from the gross estate are
    contained in sections 2031 through 2044 of the US Tax Code, which can
    be found here:

    https://www.law.cornell.edu/uscode/text/26/subtitle-B/chapter- 11/subchapter-A/part-III

    Section 2040 has the rule for joint tenancy property.


    --
    Stu
    http://DownToEarthLawyer.com

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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  • From D L@21:1/5 to Stuart O. Bronstein on Sun Aug 1 11:43:44 2021
    On Friday, July 30, 2021 at 9:29:12 AM UTC-7, Stuart O. Bronstein wrote:
    D L <debbie.l...@gmail.com> wrote:
    Stuart O. Bronstein wrote:

    What's in or out of the probate estate is purely a state law
    issue and has nothing to do with federal taxes. You're right,
    though, that in many cases when someone has rights in property
    that terminate on his death, it is not included in his gross
    estate. These are referred teo as "terminable interests." However
    joint tenancy is not considered a terminable interest, though it
    certainly looks like one.

    Stu, I was wondering if there is a list of excluded assets from
    the gross estate. Your point that state laws may come into play is
    an interesting point which I have not considered yet.
    The rules of what is included or excluded from the gross estate are
    contained in sections 2031 through 2044 of the US Tax Code, which can
    be found here:

    https://www.law.cornell.edu/uscode/text/26/subtitle-B/chapter- 11/subchapter-A/part-III

    Section 2040 has the rule for joint tenancy property.


    --
    Stu
    http://DownToEarthLawyer.com

    Thanks Stu. Your help is sincerely apprecaited.

    --
    << ------------------------------------------------------- >>
    << The foregoing was not intended or written to be used, >>
    << nor can it used, for the purpose of avoiding penalties >>
    << that may be imposed upon the taxpayer. >>
    << >>
    << The Charter and the Guidelines for submitting posts >>
    << to this newsgroup as well as our anti-spamming policy >>
    << are at www.asktax.org. >>
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