Therese Hahn - Page 7

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          property is measured by the amount realized less the adjusted               
          basis of the property.  Sec. 1001(a).4  Section 1014 generally              
          provides that the basis of property acquired from a decedent is             
          the fair market value of the property at the date of the                    
          decedent's death or on the alternate valuation date.  Sec.                  
          1014(a).  A surviving joint tenant, however, is considered to               
          have acquired property from the decedent only to the extent that            
          the property was required to be included in the estate of the               
          deceased joint tenant.  Sec. 1014(b)(9).  Correspondingly, the              
          portion of the property not included in the decedent's estate               
          retains the survivor's adjusted basis.  Thus, determination of              
          petitioner's basis in the CPW shares hinges on the portion of the           
          property required to be included in her husband's estate.                   
               Section 2040 governs the value of jointly-owned property to            
          be included in a decedent's estate.  Before 1977, section 20405             

               4Losses attributable to the sale of a family residence,                
          however, are nondeductible personal losses.  Sec. 262; Austin v.            
          Commissioner, 35 T.C. 221 (1960), affd. 298 F.2d 583 (2d Cir.               
          1962); Doerries v. Commissioner, T.C. Memo. 1991-396; sec. 1.262-           
          1(b)(4), Income Tax Regs.                                                   
               5Sec. 2040 of the Internal Revenue Code of 1954 provided:              
               SEC. 2040.  JOINT INTERESTS.                                           
                    The value of the gross estate shall include the                   
               value of all property (except real property situated                   
               outside of the United States) to the extent of the                     
               interest therein held as joint tenants by the decedent                 
               and any other person, or as tenants by the entirety by                 
               the decedent and spouse, or deposited, with any person                 
               carrying on the banking business, in their joint names                 
               and payable to either or the survivor, except such part                
                                                             (continued...)           




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