In: Accounting
Stanley and Sara purchase real estate for $600,000 and list ownership as follows: " Stanley and Sara, joint tenants with the right of survivorship." Stanley contributed $240,000 of the purchase price and Sara contributed the remaining $360,000. Stanley dies first, when the real estate is valued at $860,000. How much is included in Stanley's gross estate if Stanley and Sara are:
a. Cousins.
b. Husband and wife.
b) if Stanley and Sara are husband and wife, and Stanley dies first then after his death, all ownership will transfer to Sara and she will only the owner of that respective real estate. If they have children then during all are living each one will be one third owner of the estate, but after death of the husband or wife remaining two will get one half interest in the property if they have added children name. As per this $240,000 all is included in Stanley's gross estate.
a)Joint tenancy is generally used between spouse. but, you can also hold survivorship interest with someone else rather than your spouse or your family. So, Sara and Stanley are cousin in that case, As no heir is been mentioned, all property will transfer to co-tenant. Then $430,000 is included in Stanley's gross estate(one half part of interest).It's assume that during the living of Stanley's this $860,000 was the value and both are having same and equal proportion in the property.