Question

At the time of his death, Norton held the following interests.

∙      Land owned in joint tenancy with his sister, Emily. The land is worth $600,000 and was purchased by Norton with his own money 15 years ago for $150,000 and was deeded to him and his sister in joint tenancy at that time.

∙      Land owned in a tenancy by the entirety with his wife, Amy. The land is worth $800,000 and was purchased by Norton five years ago for $450,000 with his own money.

∙      Land owned in an equal tenancy in common with his brother, Noah. The land is worth $900,000 and was purchased by Norton four years ago for $300,000 with his own money.

∙      City of Dayton tax-exempt bonds worth $50,000.

What amount will be included in Norton’s gross estate from these interests?

a.         $900,000

b.         $1,500,000

c.         $1,700,000

d.         $1,950,000

e.         $2,400,000

Answer 1

	Amount to be considered	Explanation
Land owned in joint tenancy with his sister, Emily. The land is worth $600,000 and was purchased by Norton with his own money 15 years ago for $150,000 and was deeded to him and his sister in joint tenancy at that time.	$                                             600,000	Joint tenancy is to be included since Norton paid the purchase price with his own money
Land owned in a tenancy by the entirety with his wife, Amy. The land is worth $800,000 and was purchased by Norton five years ago for $450,000 with his own money	$                                             400,000	Under a special rule, each spouse is deemed to be an equal contributor
Land owned in an equal tenancy in common with his brother, Noah. The land is worth $900,000 and was purchased by Norton four years ago for $300,000 with his own money	$                                             900,000	Joint tenancy is to be included since Norton paid the purchase price with his own money
City of Dayton tax-exempt bonds worth $50,000	$                                                50,000	Municipal bonds are included
	$                                          1,950,000