§ 20.2056A-8. Special rules for joint property.

In 1987, D, a United States citizen, purchases real property and takes title in the names of D and S, D's spouse (a noncitizen, but a United States resident), as joint tenants with right of survivorship. In accordance with § 25.2511-1(h)(5) of this chapter, one-half of the value of the property is a gift to S. D dies in 1995. Because S is not a United States citizen, the provisions of section 2040(a) are determinative of the extent to which the real property is includible in D's gross estate. Because the joint tenancy was established before July 14, 1988, and under the applicable provisions of the Internal Revenue Code and regulations the transfer was treated as a gift of one-half of the property, one-half of the value of the property is deemed attributable to consideration furnished by S for purposes of section 2040(a). Accordingly, only one-half of the value of the property is includible in D's gross estate under section 2040(a).

The facts are the same as in Example 1, except that S dies in 1995 survived by D who is not a citizen of the United States. For purposes of applying section 2040(a), D's gift to S on the creation of the tenancy is not treated as consideration furnished by S toward the acquisition of the property. Accordingly, since S made no other contributions with respect to the property, no portion of the property is includible in S's gross estate.

The facts are the same as in Example 1, except that D and S purchase real property in 1990 making the down payment with funds from a joint bank account. All subsequent mortgage payments and improvements are paid from the joint bank account. The only funds deposited in the joint bank account are the earnings of D and S. It is established that D earned approximately 60% of the funds and S earned approximately 40% of the funds. D dies in 1995. The establishment of S's contribution to the joint bank account is sufficient to show that S contributed 40% of the consideration for the property. Thus, under paragraph § 20.2040-1(a)(2), 60% of the value of the property is includible in D's gross estate.