Estate of Marie L. Concordia, Deceased, Edward C. McReady, Executor - Page 13




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          determining the portion of the fair market value of a jointly               
          held asset that should be excluded from the gross estate, may be            
          expressed as follows:  the fair market value of the property at             
          the date of death is multiplied by a ratio that has the                     
          consideration furnished by the survivor as the numerator and the            
          total consideration paid to acquire and improve the property as             
          the denominator.  See Estate of Young v. Commissioner, 110 T.C.             
          297, 315 (1998); Estate of Van Tine v. Commissioner, T.C. Memo.             
          1998-344.                                                                   
               The approach used in section 20.2040-1(a)(2), Estate Tax               
          Regs., measures the survivor’s contribution to the jointly owned            
          property against the decedent’s contribution.  At the time of the           
          1987 agreement, decedent’s sister had just died, and decedent had           
          become the sole owner of Western.  However, the regulation, with            
          respect to the denominator of the exclusionary formula, uses the            
          language “total cost of acquisition and capital additions.”                 
               It is somewhat difficult to apply the concept of cost to the           
          circumstances of this case.  In 1987, decedent had just acquired            


               7(...continued)                                                        
               included [in decedent’s gross estate] except such part                 
               of the entire value as is attributable to the amount of                
               the consideration in money or money’s worth furnished                  
               by the other joint owner or owners.  * * *  Such part                  
               of the entire value is that portion of the entire value                
               of the property at the decedent’s death * * * which the                
               consideration in money or money’s worth furnished by                   
               the other joint owner or owners bears to the total cost                
               of acquisition and capital additions.  * * *                           





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