Question

Many years ago James and Sergio purchased property for $810,000. Although they are listed as equal co-owners, Sergio was able to provide only $360,000 of the purchase price. James treated the additional $45,000 of his contribution to the purchase price as a gift to Sergio. If the property is worth $1,093,500 at Sergio’s death, what amount would be included in Sergio’s estate if the title to the property was tenants in common? What if the title was joint tenancy with right of survivorship? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

CalculaLIULIS. RUUMu yuui al aliswers LU lile lealesL WIule uullal alluun) Amount to be included in Sergio's estate if: Title to the property was tenants in common Title to the property were joint tenancy with right of survivorship

Answer 1

Amount to be included in Sergio's estate if:
Title to the property was tenents in common	$ 546,750
Title to the property were joint tenancy with right of survivorship	$ 486,000

Note 1 : If the title to the property is held as tenants in common, Sergio would include half the value of the property i.e. $ 546,750 in his estate.

Note 2 : In contrast, if the title is held as joint tenancy with right of survivorship, Sergio would include the proportion of the value as the amount of the purchase price he initially provided. Sergio provided 4/9 th of the prce ($ 360,000 / $ 810,000) so his estate would include $486,000.