§2040 — Joint interests
37 citing cases
Statute Text — 26 U.S.C. §2040
The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship 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 thereof as may be shown to have originally belonged to such other person and never to have been received or acquired by the latter from the decedent for less than an adequate and full consideration in money or money’s worth: Provided, That where such property or any part thereof, or part of the consideration with which such property was acquired, is shown to have been at any time acquired by such other person from the decedent for less than an adequate and full consideration in money or money’s worth, there shall be excepted only such part of the value of such property as is proportionate to the consideration furnished by such other person: Provided further, That where any property has been acquired by gift, bequest, devise, or inheritance, as a tenancy by the entirety by the decedent and spouse, then to the extent of one-half of the value thereof, or, where so acquired by the decedent and any other person as joint tenants with right of survivorship and their interests are not otherwise specified or fixed by law, then to the extent of the value of a fractional part to be determined by dividing the value of the property by the number of joint tenants with right of survivorship.
Notwithstanding subsection (a), in the case of any qualified joint interest, the value included in the gross estate with respect to such interest by reason of this section is one-half of the value of such qualified joint interest.
For purposes of paragraph (1), the term “qualified joint interest” means any interest in property held by the decedent and the decedent’s spouse as—
tenants by the entirety, or
joint tenants with right of survivorship, but only if the decedent and the spouse of the decedent are the only joint tenants.
Treasury Regulations
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Treas. Reg. §20.2040-1Joint interests
(a) In general. A decedent's gross estate includes under section 2040 the value of property held jointly at the time of the decedent's death by the decedent and another person or persons with right of survivorship, as follows:
(1) To the extent that the property was acquired by the decedent and the other joint owner or owners by gift, devise, bequest, or inheritance, the decedent's fractional share of the property is included.
(2) In all other cases, the entire value of the property is included 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. See § 20.2043-1 with respect to adequacy of consideration. Such part of the entire value is that portion of the entire value of the property at the decedent's death (or at the alternate valuation date described in section 2032 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. In determining the consideration furnished by the other joint owner or owners, there is taken into account only that portion of such consideration which is shown not to be attributable to money or other property acquired by the other joint owner or owners from the decedent for less than a full and adequate consideration in money or money's worth.
The entire value of jointly held property is included in a decedent's gross estate unless the executor submits facts sufficient to show that property was not acquired entirely with consideration furnished by the decedent, or was acquired by the decedent and the other joint owner or owners by gift, bequest, devise, or inheritance.
(b) Meaning of “property held jointly”. Section 2040 specifically covers property held jointly by the decedent and any other person (or persons), property held by the decedent and spouse as tenants by the entirety, and a deposit of money, or a bond or other instrument, in the name of the decedent and any other person and payable to either or the survivor. The section applies to all classes of property, whether real or personal, and regardless of when the joint interests were created. Furthermore, it makes no difference that the survivor takes the entire interest in the property by right of survivorship and that no interest therein forms a part of the decedent's estate for purposes of administration. The section has no application to property held by the decedent and any other person (or persons) as tenants in common.
(c) Examples. The application of this section may be explained in the following examples in each of which it is assumed that the other joint owner or owners survived the decedent:
(1) If the decedent furnished the entire purchase price of the jointly held property, the value of the entire property is included in his gross estate;
(2) If the decedent furnished a part only of the purchase price, only a corresponding portion of the value of the property is so included;
(3) If the decedent furnished no part of the purchase price, no part of the value of the property is so included;
(4) If the decedent, before the acquisition of the property by himself and the other joint owner, gave the latter a sum of money or other property which thereafter became the other joint owner's entire contribution to the purchase price, then the value of the entire property is so included, notwithstanding the fact that the other property may have appreciated in value due to market conditions between the time of the gift and the time of the acquisition of the jointly held property;
(5) If the decedent, before the acquisition of the property by himself and the other joint owner, transferred to the latter for less than an adequate and full consideration in money or money's worth other income-producing property, the income from which belonged to and became the other joint owner's entire contribution to the purchase price, then the value of the jointly held property less that portion attributable to the income which the other joint owner did furnish is included in the decedent's gross estate;
(6) If the property originally belonged to the other joint owner and the decedent purchased his interest from the other joint owner, only that portion of the value of the property attributable to the consideration paid by the decedent is included;
(7) If the decedent and his spouse acquired the property by will or gift as tenants by the entirety, one-half of the value of the property is included in the decedent's gross estate; and
(8) If the decedent and his two brothers acquired the property by will or gift as joint tenants, one-third of the value of the property is so included.
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Treas. Reg. §20.2040-1(a)In general.
In general. A decedent's gross estate includes under section 2040 the value of property held jointly at the time of the decedent's death by the decedent and another person or persons with right of survivorship, as follows:
(1) To the extent that the property was acquired by the decedent and the other joint owner or owners by gift, devise, bequest, or inheritance, the decedent's fractional share of the property is included.
(2) In all other cases, the entire value of the property is included 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. See § 20.2043-1 with respect to adequacy of consideration. Such part of the entire value is that portion of the entire value of the property at the decedent's death (or at the alternate valuation date described in section 2032 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. In determining the consideration furnished by the other joint owner or owners, there is taken into account only that portion of such consideration which is shown not to be attributable to money or other property acquired by the other joint owner or owners from the decedent for less than a full and adequate consideration in money or money's worth.
The entire value of jointly held property is included in a decedent's gross estate unless the executor submits facts sufficient to show that property was not acquired entirely with consideration furnished by the decedent, or was acquired by the decedent and the other joint owner or owners by gift, bequest, devise, or inheritance.
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Treas. Reg. §20.2040-1(b)Meaning of “property held jointly”.
Meaning of “property held jointly”. Section 2040 specifically covers property held jointly by the decedent and any other person (or persons), property held by the decedent and spouse as tenants by the entirety, and a deposit of money, or a bond or other instrument, in the name of the decedent and any other person and payable to either or the survivor. The section applies to all classes of property, whether real or personal, and regardless of when the joint interests were created. Furthermore, it makes no difference that the survivor takes the entire interest in the property by right of survivorship and that no interest therein forms a part of the decedent's estate for purposes of administration. The section has no application to property held by the decedent and any other person (or persons) as tenants in common.
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Treas. Reg. §20.2040-1(c)Examples.
Examples. The application of this section may be explained in the following examples in each of which it is assumed that the other joint owner or owners survived the decedent:
(1) If the decedent furnished the entire purchase price of the jointly held property, the value of the entire property is included in his gross estate;
(2) If the decedent furnished a part only of the purchase price, only a corresponding portion of the value of the property is so included;
(3) If the decedent furnished no part of the purchase price, no part of the value of the property is so included;
(4) If the decedent, before the acquisition of the property by himself and the other joint owner, gave the latter a sum of money or other property which thereafter became the other joint owner's entire contribution to the purchase price, then the value of the entire property is so included, notwithstanding the fact that the other property may have appreciated in value due to market conditions between the time of the gift and the time of the acquisition of the jointly held property;
(5) If the decedent, before the acquisition of the property by himself and the other joint owner, transferred to the latter for less than an adequate and full consideration in money or money's worth other income-producing property, the income from which belonged to and became the other joint owner's entire contribution to the purchase price, then the value of the jointly held property less that portion attributable to the income which the other joint owner did furnish is included in the decedent's gross estate;
(6) If the property originally belonged to the other joint owner and the decedent purchased his interest from the other joint owner, only that portion of the value of the property attributable to the consideration paid by the decedent is included;
(7) If the decedent and his spouse acquired the property by will or gift as tenants by the entirety, one-half of the value of the property is included in the decedent's gross estate; and
(8) If the decedent and his two brothers acquired the property by will or gift as joint tenants, one-third of the value of the property is so included.
37 Citing Cases
onprobate assets that were included by virtue ofsections 2034-2042. Specifically, those persons include: (1) Ms. Atwell, who received the brokerage accounts as the survivingjoint tenant in ajoint tenancy with rights ofsurvivorship, - 18 - [*18] see sec. 2040, and who received the proceeds oflife insurance policies insuring Mr. Sacks' life, see sec. 2042; (2) Ms. Parker, who received the Bayside residence as the surviving tenant in ajoint tenancy with rights ofsurvivorship, see sec. 2040; (3) Ira
2010), I think the principle should guide us in declining to overrule Humana Inc.
ess Co., 289 U.S. 689, 694 (1933). While usually invoked by a court to justify a stay in discovery on other issues when one issue is dispositive ofa case, 8A Charles Allen Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure, sec. 2040, at 198 n.7 (3d ed. 2010), I think the principle should guide us in declining to overrule Humana Inc. & Subs. v. Commissioner, 88 T.C. 197 (1987), affd in part, rev'd in part and remanded, 881 F.2d 247 (6th Cir. 1989), to the extent that it
ess Co., 289 U.S. 689, 694 (1933). While usually invoked by a court to justify a stay in discovery on other issues when one issue is dispositive ofa case, 8A Charles Allen Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure, sec. 2040, at 198 n.7 (3d ed. 2010), I think the principle should guide us in declining to overrule Humana Inc. & Subs. v. Commissioner, 88 T.C. 197 (1987), affd in part, rev'd in part and remanded, 881 F.2d 247 (6th Cir. 1989), to the extent that it
ss Co., 289 U.S. 689, 694 (1933). While usually invoked by a court to justify a stay in discovery on other issues when one issue is dispositive of a case, 8A Charles Allen Wright, Arthur R. Miller & Richard L. Marcus, Federal Practice and Procedure, sec. 2040, at 198 n.7 (3d ed. 2010), I think the principle should guide us in declining to overrule Humana Inc. & Subs. v. Commissioner, 88 T.C. 197 (1987), aff’d in part, rev’d in part and remanded, 881 F.2d 247 (6th Cir. 1989), to the extent that i
Section 2040 creates a rebuttable presumption that the entire value of the jointly owned property is includable in the decedent's estate with the burden falling upon the estate to show the consideration. Hahn v. Commissioner, 110 T.C. 140, 144 (1998); Estate of Heidt v. Commissioner, 8 T.C. 969 (1947), affd. per curiam 170 F.2d 1021 (9th Cir. 1948)
In pertinent part, section 2040 provides: “The value of the gross estate shall include the value of all property to the extent of the interest therein held as joint tenants with right of survivorship by the decedent and any other person”.
In Estate of Young, we held that section 2040 provides an "artificial inclusion" of joint tenancy property, the entire value less any contribution by the surviving joint tenant.
In Estate of Young, we held that section 2040 provides an “artificial inclusion” of joint tenancy property, the entire value less any contribution by the surviving joint tenant.
With respect to the 11 items, decedent's estate reported contribution credits under section 2040 and fractional interest discounts on certain of the 11 items.
2040, I.R.C., provide an explicit approach to valuing joint tenancy. Fractional interest discounts and lack of marketability discounts are inapplicable to the valuation of joint tenancy under sec. 2040(a), I.R.C. Held, further: P is liable for the addition to tax for late filing under sec. 6651(a), I.R.C. Lance M. Weagant and Randall D. Fowler, for petitioner. Dwight M. Montgomery, for respondent. WRIGHT, Judge: Respondent determined a deficiency of $154,545 in petitioner's Federal estate tax an
Conclusion For the foregoing reasons, we hold that the "new" definition of "qualified joint interests" in section 2040(b)(2) did not expressly or impliedly repeal the effective date of section 2040(b)(1). Thus, section 2040(b)(1) does not apply to spousal joint interests created before January 1, 1977.
ibuted - 2 - consideration equal to at least one-half of the total consideration that decedent and his spouse paid for the three parcels of real property. If so, one-half of the value of the three properties is excluded from decedent's estate under section 2040. Ann Van Tine performed valuable services for her father's construction business from 1955 to the 1970's, but the record does not show how much consideration decedent and his wife paid to buy and improve the three parcels. As a result, we
Section 2040 governs the value of jointly owned property to be included in a decedent’s estate. Before 1977, section 2040 provided that the gross estate includes the value of all property held at the time of a decedent’s death by the decedent and another person in a joint tenancy or tenancy by the entirety, except such part of the entire value that
Having determined that the Young property was held in joint tenancy, section 2040, along with section 2031, is applicable.
62 (1934) (joint and survivorship tenancy).14 Similarly, funds deposited in joint and survivorship bank accounts, title to which passes to the survivor under State law, while included in a decedent’s gross estate for Federal transfer tax purposes, sec. 2040; sec. 20.2040-1(b), Estate Tax Regs., pass outside the subchapter J estate because the funds are not subject to estate administration. Petersen v. Commissioner, supra. Proceeds of life insurance policies, sec. 101(a); sec. 1.101-1(a), Income
Whether petitioner, pursuant to section 2040, is entitled to exclude from the gross estate $158,942 of joint tenancy property.
Under section 2040, property held at death by two spouses as tenants by the entireties is subject to estate taxation upon death of one, to the extent of one-half the value. Sec. 2040(b). Petitioner argues that because decedent received the property (as tenant by the entireties) from decedent's spouse in 1974 for no consideration from decedent, upon the d