- 13 -
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. * * *
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011