- quote -

The books I was quoting were for joint tenants and the
estate tax - not the exact situation with the original
poster!

My bad!

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"Dave W." <nospam650[at]yahoo.com> wrote:
- quote -

And that is absolutely correct - as long as the son was
added to the title as a joint tenant. Section 2036
specifically requires that result.

But if the son is added to the title in any other way, that
is not the result.

We were specifically talking about the son being added as a
remainderman after the mother retained a life estate. In
that case, if the son were to die first (which was his
question) his share in the property would be included in his
estate.

In support of my position, Drew cited Treasure Regulation
20-2031-7, which says, among other things,

"the fair market value of annuities, life estates, terms of
years, remainders, and reversionary interests for estates of
decedents is the present value of such interests,... "

If the son were to die first, he'd be the decedent. And his
remainder interest would be included in his estate at the
present value of his interest on the date of his death.

Stu

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Dave W." <nospam650[at]yahoo.com> wrote:

snip

- quote -

snip

I have previously quoted Regulation 20.2031-7 which shows
how to value a remainder interest for the son. The actual
remainder interest is typically included under 2037 or 2033.

While not authoritative, you can look at the form 706
instructions for Schedule F. Here is says to include
Remainder Interests. That is what son has when the deed has
been transferred to him but mom has retained a life estate.

The answer is in the law, the Regulations, court cases, etc.
The law overrides what your books say.

---
Drew Edmundson, CPA
Cary, NC

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"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net> wrote

- quote -

There's not much more I can do to for you Stu.
Maybe I could do more research on court cases or go over the
federal tax "tracing rules" but I get the feeling you just
don't believe me!

But it's absolutely true (and it's discussed in other "mass
market" estate books) with the example of a widower who adds
a son to the title on a personal residence and the son dies
first but didn't contribute anything, with the consequence
of the son's federal estate tax valuation being $ - 0-. I
mentioned this once to an estate lawyer and she really did
ask what happens if both die in plane crash! All I can say
let's just agree to disagree --

The best part of this discussions is you can look at mass
market E A estate planning books to correct future clients
with estate planning misconceptions! (Maybe I'm been reading
"Estate Planning for Dummies" !)

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"Dave W." <nospam650[at]yahoo.com> wrote:

- quote -

I will go take a look at the book. But for your information
that book is not a scholarly treatise, it is not a book for
tax professionals, but a book by an EA for the mass market.
He has no special training and no inside information. So as
far as I'm concerned if he did say what you claim, there is
no reason to believe it is any more correct than the
opinions of anyone here.

Though my guess is that you misunderstood what he said.

- quote -

I've been doing estate planning for more than 25 years and
have never seen anything authoritative that says what you
claim. In fact, I've never heard of anyone claiming what
you are.

And I'm not the only one here who came to the conclusion
that you are incorrect on this point.

- quote -

And certainly don't rely on the experience of someone who
has no experience other than reading books by people with
few credentials and published for the mass public, that are
written to tell the reader just what he wants to hear.

Stu

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Perry1" <spam[at]msn.net> wrote:
- quote -

This is the original post:

I would like to get your thoughts on this scenario:

Mom quit claim deeds to her four children property in
tenancy in common and retains a life estate. Son dies
before Mom.

Does the son have any interest that must be included in his
gross estate for estate tax purposes?
-------

Note that it mentions a retained life estate held by mom,
not jointly owned property. The son has a remainder
interest, see Reg. 20.2031-7, it is included in son's
estate. The value is not 1/4 of the value of the home but
is the value of 1/4 of the home adjusted using the tables in
the Regulation.

---
Drew Edmundson, CPA
Cary, NC

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"Perry1" wrote:
- quote -

Yes, that was the question. And I have given authorities
indicating that it would be included in the son's estate.

Do you have anything contrary, other than the fact that you
think that's the rule?

OK, once again - Page 74 "Living Wills and Trust" Probate
and Taxation, Holmes F. Crouch (2005) virtually identical
example to the OP situation. The amount included in the
estate of the son for the purposes of the estate tax (if the
son didn't contribute anything) - $- 0 -, zilch, nada. And
other books on estates and probate say similar things but
more to the point of avoiding probate. If you are a lawyer
and don't know this, well ......... but the good thing is
you're reading this forum and learning!

And I will also add (again), if anyone has a complex estate
situation consult with a qualified professional, don't rely
on anonymous internet sources!

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"Perry1" <spam[at]msn.net> wrote:
- quote -

Yes, that was the question. And I have given authorities
indicating that it would be included in the son's estate.

Do you have anything contrary, other than the fact that you
think that's the rule?

Stu

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Stuart A. Bronstein" <spamtrap[at]sbcglobal.net
- quote -

The quote of the OP appeared to drop off in repeated posting
but the answer is NOT based on incomplete information, just
a pertinent example. In the example, the son's estate tax
calculation does NOT include any amount of the father's
jointly held real estate if the son didn't contribute
anything.

(MOD - sorry to keep flogging a dead horse!)

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