-7-
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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