Matt and Patricia are husband and wife and live in Oregon. In 2010 and using her funds, Patricia purchased a residence for $400,000, listing title to the property as "Matt and Patricia, joint tenants with right of survivorship." In 2020, Matt dies before Patricia when the residence is worth $2 million. A correct statement as to these transactions is:
a.In 2010, Patricia did not make a taxable gift to Matt.
b.In 2020, Matt's gross estate includes $1 million and a marital deduction of $1 million is allowed for estate tax purposes.
c.In 2020, Matt's estate includes nothing as to the property.
d.In 2010, Patricia made a gift to Matt but no marital deduction is available for gift tax purposes.
As per the given case, Patricia purchased an estate worth 400,000 and registered as joint tenants both Matt and Patricia. This means that there is equal ownership in property of 50% each that is 400,000 x 50% = 200,000.
Here we can conclude that Patricia gifted estatew 200,000 to Matt.
And in 2020, the estate is worth 2 million in which Matt's part is 50% that is 2 million x 50% = 1 million, which is allowed as a marital deduction of 1 million is allowed for estate tax purposes.
Therefore the answer is, b, Matt's gross estate include 1 million and a marital deduction of 1 million is allowed for estate tax purposes.
Matt and Patricia are husband and wife and live in Oregon. In 2010 and using her...