An unlimited exclusion is allowed for tuitions

Info icon This preview shows pages 2–3. Sign up to view the full content.

View Full Document Right Arrow Icon
amount is. An unlimited exclusion is allowed for tuitions payments only if those tuition payments are paid directly to the qualifying educational institution. However these payments do not include amounts paid for books, supplies, or room and board. For medical expenses, just as with educational expenses, the payment must be made by the donor directly to a doctor or any organization providing medical service 4. a) Under the circumstance of Emile and Colette receiving the property as a gift from Douglas, half of the FMV of the property will be include in Emile’s estate. IRC § 2040 states, the decedent’s fractional share of the property is included in the gross estate to the extent of one-half the value of the property or to the extent that the property was acquired by the decedent and joint tenant the value will be determined by dividing equally among the number of joint tenants with rights of survivorship. This holds true if the property was acquired by gift, devise, bequest, or inheritance. b) Under the circumstance of Colette providing all the purchase price of the property, none of the property is included in Emile’s gross estate. Colette was the one who used her money to purchase the property, not Emile, the decedent. None of the fair market value of the property is included in the gross estate of Emile under Treasury Regulations 20.2040-1(c)(1). c) Under the circumstance of Colette’s contribution being a gift from Emile, the entire value of the contribution will be included in the value of his estate. Even though the property may have appreciated in value, the entire value of the property is included if the decedent gave the joint owner a sum of money or other property which then was used as the joint owners contribution price for the property in question. Treasury Regulations 20.2040-1(c)(4) provide that the entire fair market value of the property is included in the gross estate of Emile. d) Under the circumstance of Emile’s contribution being derived from income generated by property he received as a gift from Colette, the entire value of the jointly held property less that portion attributable to the income which Colette contributed is included in Emile’s gross estate. According to Treasury Regulations 20.2040-1(c)(5) before the acquisition of the property by the decedent and the joint owner, if the decedent transferred property to the joint owner for less than adequate and full consideration in money, 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. 5. Due to the unlimited marital deduction, under a tenancy by the entirety or a joint tenancy with rights of survivorship there are usually no gift tax consequences. Sometimes when a spouse is not a citizen of the United States, there is not gift tax marital deduction available. This does not however apply to the annual exclusion when a gift is made to a non-citizen. When the first spouse dies, one-half of the jointly held property will be included in the decedent’s gross estate, but due to the estate tax marital deduction no estate tax will occur. Instead the surviving
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern