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<p class="MsoNormal"><span style="font-size:11.0pt">So on reading this, I think maybe there’s a discrepancy beween WA law and IRS regulation. IRS regs appear to contemplate property held in “joint tenancy” with unequal ownership, while under WA law, “joint
tenancy” of real property with unequal ownership does not exist and only JTWROS with equal ownership is permitted. Or am I just wrong on WA law on this point? I know that JTWROS works differently for bank accounts; I’m thinking only of real property right
now.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Alternative types of acquisition of the real property:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<ol style="margin-top:0in" start="1" type="1">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1"><span style="font-size:11.0pt">M or W purchased property alone, then later added the other to title and added JTWROS. Or,<o:p></o:p></span></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1"><span style="font-size:11.0pt">M and W purchased property together, and each contributed funds either in equal or unequal portions, and took initial title as JTWROS.<o:p></o:p></span></li></ol>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Under #1, I think the second transfer to add the other to title is meaningful and it has to be determined whether that was an “add to title” with nominal financial transfer, or it was a gift of financial equity.
Under Washington law, I think by definition it’s not possible to hold real property JWTROS without the equitable interests being equal. So if the parties assert it is “add to title” only with no financial interest, that breaks the ROS and leaves them as tenants
in common. If they want the ROS, it has to be characterized as a valuable gift transfer, so that decedent only owns 50% at time of death.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Under #2, even if the parties purchase with unequal contributions, taking the property at JTWROS necessitates equal ownership. BUT the IRS says ownership is dictated by comparative contribution. So either
the acquisition deed has to be deemed a simultaneous “purchase plus effective gift transfer between grantees to equalize ownership” in order to create JTWROS; or the parties would have to acknowledge unequal ownership, which I believe breaks the ROS and leaves
them as tenants in common. So again, I think the decedent would need to claim only half the property in their estate, and achieve a step-up in basis on only that half, in order for the ROS to be effective.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">I am happy to be told I’m wrong; again, applying logic can take one to alien terroritories unrelated to the actual legal rules.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-size:11.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Sayre Law Offices, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><a href="mailto:eric@sayrelawoffices.com"><span style="color:#467886">eric@sayrelawoffices.com</span></a><o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif"> wsbarp-bounces@lists.wsbarppt.com <wsbarp-bounces@lists.wsbarppt.com>
<b>On Behalf Of </b>Heather de Vrieze<br>
<b>Sent:</b> Tuesday, September 17, 2024 12:41 PM<br>
<b>To:</b> WSBA Real Property Listserv <wsbarp@lists.wsbarppt.com><br>
<b>Subject:</b> Re: [WSBARP] Stepped up basis<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">The IRS rules for basis adjustment will depend on whether assets are included in the decedent’s estate for estate tax purposes (even if the estate is so small that there are no estate taxes). Generally if an asset is included in the gross
estate, it receives a basis adjustment, if not, it does not.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">What is included in the estate is addressed in the Regulations:<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">26 CFR § 20.2040-1 - Joint interests. <o:p></o:p></p>
<p class="MsoNormal"><b>§ 20.2040-1 Joint interests.<o:p></o:p></b></p>
<p class="MsoNormal"><b>(a)</b> <b><i>In general.</i></b> A decedent's gross estate includes under section 2040 the value of property held jointly at the time of the decedent's death by the decedent and another <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=5b6e6898a41e8926772a727414713269&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">person</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=5b6e6898a41e8926772a727414713269&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">persons</a> with
right of <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=cb99ab6fb2448b436dfce5dbf56a467c&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">survivorship</a>, as follows:<o:p></o:p></p>
<p class="MsoNormal"><b>(1)</b> To the extent that the property was acquired by the decedent and the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owners</a> by
gift, devise, bequest, or inheritance, the decedent's fractional share of the property is included.<o:p></o:p></p>
<p class="MsoNormal"><b>(2)</b> In all other cases, the entire value of the property is included except such part of the entire value as is attributable to the amount of the consideration in money or money's worth furnished by the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or
owners. See <a href="https://www.law.cornell.edu/cfr/text/26/20.2043-1">§ 20.2043-1</a> with respect to adequacy of consideration. Such part of the entire value is that portion of the entire value of the property at the decedent's death (or at the alternate <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=93f8c815fcecab106aa5029ca638939b&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">valuation
date</a> described in section 2032 which the consideration in money or money's worth furnished by the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owners</a> bears
to the total cost of acquisition and capital additions. In determining the consideration furnished by the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or
owners, there is taken into <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=c3b57a31fc226d7b84e26175afe251f2&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">account</a> only
that portion of such consideration which is shown not to be attributable to money or other property acquired by the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owners</a> from
the decedent for less than a full and adequate consideration in money or money's worth.<o:p></o:p></p>
<p class="MsoNormal">The entire value of jointly held property is included in a decedent's gross estate unless the <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=81afc5f66947a71c56a5decb678db11f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">executor</a> submits
facts sufficient to show that property was not acquired entirely with consideration furnished by the decedent, or was acquired by the decedent and the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owners</a> by
gift, bequest, devise, or inheritance.<o:p></o:p></p>
<p class="MsoNormal"><b>(b)</b> <b><i>Meaning of “property held jointly”.</i></b> Section 2040 specifically covers property held jointly by the decedent and any other <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=5b6e6898a41e8926772a727414713269&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">person</a> (or
persons), property held by the decedent and spouse as tenants by the entirety, and a deposit of money, or a <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=7dfdff208336864b99fbbead2a4a73fa&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">bond</a> or
other instrument, in the name of the decedent and any other <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=5b6e6898a41e8926772a727414713269&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">person</a> and
payable to either or the survivor. The section applies to all classes of property, whether real or personal, and regardless of when the joint interests were created. Furthermore, it makes no difference that the survivor takes the entire interest in the property
by right of <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=cb99ab6fb2448b436dfce5dbf56a467c&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">survivorship</a> and that no
interest therein forms a part of the decedent's estate for purposes of administration. The section has no application to property held by the decedent and any other <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=5b6e6898a41e8926772a727414713269&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">person</a> (or
persons) as tenants in common.<o:p></o:p></p>
<p class="MsoNormal"><b>(c)</b> <b><i>Examples.</i></b> The application of this section may be explained in the following <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=84ca440e9c0236c7d3ee1a79845983c5&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">examples</a> in
each of which it is assumed that the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> or <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owners</a> survived
the decedent:<o:p></o:p></p>
<p class="MsoNormal"><b>(1)</b> If the decedent furnished the entire purchase price of the jointly held property, the value of the entire property is included in his gross estate;<o:p></o:p></p>
<p class="MsoNormal"><b>(2)</b> If the decedent furnished a part only of the purchase price, only a corresponding portion of the value of the property is so included;<o:p></o:p></p>
<p class="MsoNormal"><b>(3)</b> If the decedent furnished no part of the purchase price, no part of the value of the property is so included;<o:p></o:p></p>
<p class="MsoNormal"><b>(4)</b> If the decedent, before the acquisition of the property by himself and the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a>,
gave the latter a sum of money or other property which thereafter became the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a>'s
entire contribution to the purchase price, then the value of the entire property is so included, notwithstanding the fact that the other property may have appreciated in value due to market conditions between the time of the gift and the time of the acquisition
of the jointly held property;<o:p></o:p></p>
<p class="MsoNormal"><b>(5)</b> If the decedent, before the acquisition of the property by himself and the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a>,
transferred to the latter for less than an adequate and full consideration in money or money's worth other income-producing property, the income from which belonged to and became the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a>'s
entire contribution to the purchase price, then the value of the jointly held property less that portion attributable to the income which the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> did
furnish is included in the decedent's gross estate;<o:p></o:p></p>
<p class="MsoNormal"><b>(6)</b> If the property originally belonged to the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a> and
the decedent purchased his interest from the other joint <a href="https://www.law.cornell.edu/definitions/index.php?width=840&height=800&iframe=true&def_id=85307a11a6f904ecc097fcc4cd8a417f&term_occur=999&term_src=Title:26:Chapter:I:Subchapter:B:Part:20:Subjgrp:5:20.2040-1">owner</a>,
only that portion of the value of the property attributable to the consideration paid by the decedent is included;<o:p></o:p></p>
<p class="MsoNormal"><b>(7)</b> If the decedent and his spouse acquired the property by will or gift as tenants by the entirety, one-half of the value of the property is included in the decedent's gross estate; and<o:p></o:p></p>
<p class="MsoNormal"><b>(8)</b> If the decedent and his two brothers acquired the property by will or gift as joint tenants, one-third of the value of the property is so included.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">The rules and some examples.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Heather<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Vladimir Script";color:#1F497D;mso-ligatures:standardcontextual">Heather S. de Vrieze</span><b><span style="font-size:16.0pt;color:#1F497D;mso-ligatures:standardcontextual"><br>
</span></b><i><span style="font-family:"Garamond",serif;color:#1F497D;mso-ligatures:standardcontextual">Attorney-at-Law</span></i><i><span style="font-size:11.0pt;font-family:"Garamond",serif;color:#1F497D"><o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-family:"Garamond",serif;color:#1F497D"><img border="0" width="189" height="105" style="width:1.9687in;height:1.0937in" id="Picture_x0020_152161512" src="cid:image001.jpg@01DB0903.47DF25C0"></span></i><i><span style="font-family:"Garamond",serif;color:#1F497D;mso-ligatures:standardcontextual"><o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">3909 California Avenue SW<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">Seattle, WA 98116-3705
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">(206)938-5500
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:standardcontextual"><a href="mailto:heatherd@westseattlelaw.com"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">heatherd@westseattlelaw.com</span></a></span><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:standardcontextual"><a href="http://www.westseattlelaw.com/"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">www.westseattlelaw.com</span></a></span><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">
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<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:red;mso-ligatures:standardcontextual"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Arial",sans-serif;color:#002E8A;mso-ligatures:standardcontextual">Click here to connect with de Vrieze | Carney on Facebook:
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<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Eric Nelsen<br>
<b>Sent:</b> Tuesday, September 17, 2024 12:11 PM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] Stepped up basis<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Heather, doesn’t JTWROS mandate equal ownership, as one of the “four unities”? So that adding Woman to title, even as an EP tool, would necessitate an inter vivos gift of 50% of equity, leaving Man with only
50% ownership at time of death. Or does the IRS treat it differently?<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-size:11.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Sayre Law Offices, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><a href="mailto:eric@sayrelawoffices.com"><span style="color:#467886">eric@sayrelawoffices.com</span></a><o:p></o:p></span></p>
</div>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Heather de Vrieze<br>
<b>Sent:</b> Tuesday, September 17, 2024 11:48 AM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] Stepped up basis<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">The portion of the property that would receive a basis adjustment is directly related to the portion owned by the decedent.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">If in your example the Man had purchased the property and added the Woman to title as JTWROS as an estate planning tool, then 100% of the property would be included in the estate of the Man who died (for estate tax purposes) and would receive
a basis adjustment. <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">If the property were purchased jointly and they had contributed to it equally, 50% would receive a basis adjustment.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">From IRS pub 551<o:p></o:p></p>
<p class="MsoNormal"><b>Property Held by Surviving Tenant<o:p></o:p></b></p>
<p class="MsoNormal">The following example explains the rule for the basis of property held by a surviving tenant in joint tenancy or tenancy by the entirety.<o:p></o:p></p>
<p class="MsoNormal"><b><i>Example.</i></b><o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">John and Jim owned, as joint tenants with right of survivorship, business property purchased for $30,000. John furnished two-thirds of the purchase price and Jim furnished one-third. Depreciation deductions allowed before John's death were
$12,000. Under local law, each had a half interest in the income from the property. At the date of John's death, the property had an FMV of $60,000, two-thirds of which is includible in John's estate. Jim’s basis in the property at the date of John's death
is figured as follows:<o:p></o:p></p>
<table class="MsoNormalTable" border="0" cellspacing="0" cellpadding="0" style="border-collapse:collapse">
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<p class="MsoNormal">Interest Jim bought with his own funds—<sup>1</sup>/<sub>3</sub> of $30,000 cost<o:p></o:p></p>
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<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal">$10,000<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal">Interest Jim received on John's death—<sup>2</sup>/<sub>3</sub> of $60,000 FMV<o:p></o:p></p>
</td>
<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal"><u>40,000</u><o:p></o:p></p>
</td>
<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal">$50,000<o:p></o:p></p>
</td>
</tr>
<tr>
<td colspan="2" valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal">Minus: ½ of $12,000 depreciation before John's death<o:p></o:p></p>
</td>
<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal"><u>6,000</u><o:p></o:p></p>
</td>
</tr>
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<td colspan="2" valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal"><b>Jim's basis at the date of John's death</b><o:p></o:p></p>
</td>
<td valign="top" style="padding:0in 3.75pt 0in 3.75pt">
<p class="MsoNormal"><b>$44,000</b><o:p></o:p></p>
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<p class="MsoNormal">If Jim hadn't contributed any part of the purchase price, Jim’s basis at the date of John's death would be $54,000. This is figured by subtracting from the $60,000 FMV the $6,000 depreciation allocated to Jim's half interest before the
date of death. <o:p></o:p></p>
<p class="MsoNormal">If under local law Jim had no interest in the income from the property and contributed no part of the purchase price, Jim’s basis at John's death would be $60,000, the FMV of the property.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Heather<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal"><span style="font-size:16.0pt;font-family:"Vladimir Script";color:#1F497D;mso-ligatures:standardcontextual">Heather S. de Vrieze</span><b><span style="font-size:16.0pt;color:#1F497D;mso-ligatures:standardcontextual"><br>
</span></b><i><span style="font-family:"Garamond",serif;color:#1F497D;mso-ligatures:standardcontextual">Attorney-at-Law</span></i><i><span style="font-size:11.0pt;font-family:"Garamond",serif;color:#1F497D"><o:p></o:p></span></i></p>
<p class="MsoNormal"><i><span style="font-family:"Garamond",serif;color:#1F497D"><img border="0" width="189" height="105" style="width:1.9687in;height:1.0937in" id="Picture_x0020_2" src="cid:image001.jpg@01DB0903.47DF25C0"></span></i><i><span style="font-family:"Garamond",serif;color:#1F497D;mso-ligatures:standardcontextual"><o:p></o:p></span></i></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">3909 California Avenue SW<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">Seattle, WA 98116-3705
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">(206)938-5500
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:standardcontextual"><a href="mailto:heatherd@westseattlelaw.com"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">heatherd@westseattlelaw.com</span></a></span><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="mso-ligatures:standardcontextual"><a href="http://www.westseattlelaw.com/"><span style="font-size:10.0pt;font-family:Nyala;color:#44524E">www.westseattlelaw.com</span></a></span><span style="font-size:10.0pt;font-family:Nyala;color:#44524E;mso-ligatures:standardcontextual">
<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:Nyala;color:red;mso-ligatures:standardcontextual"><o:p> </o:p></span></p>
<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Arial",sans-serif;color:#002E8A;mso-ligatures:standardcontextual">Click here to connect with de Vrieze | Carney on Facebook:
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<p class="MsoNormal"><span style="font-size:8.0pt;color:#A6A6A6;mso-ligatures:standardcontextual">CONFIDENTIAL & PRIVILEGED. This e-mail message may contain legally privileged and/or confidential information. If you have received this e-mail in error, please
notify the sender immediately and delete all copies of this e-mail message and any attachment.</span><span style="font-size:16.0pt;font-family:"Cambria",serif;color:blue;mso-ligatures:standardcontextual"><o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<div>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Eric Nelsen<br>
<b>Sent:</b> Tuesday, September 17, 2024 10:10 AM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> Re: [WSBARP] Stepped up basis<o:p></o:p></span></p>
</div>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Please post responses to list!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">My guess based on logic (“logic” = a way of doing things wrong, but with confidence): There is a step-up in basis only as to the decedent’s interest. By definition, JTWROS interests are equal, so the basis
on his 50% interest is stepped up, but her 50% is not. I have no IRS regulation or statutory cite to back this up.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Sincerely,<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Eric C. Nelsen<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Sayre Law Offices, PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">1417 31st Ave South<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">Seattle WA 98144-3909<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt">206-625-0092<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><a href="mailto:eric@sayrelawoffices.com"><span style="color:#467886">eric@sayrelawoffices.com</span></a><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">From:</span></b><span style="font-size:11.0pt;font-family:"Calibri",sans-serif">
<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a> <<a href="mailto:wsbarp-bounces@lists.wsbarppt.com">wsbarp-bounces@lists.wsbarppt.com</a>>
<b>On Behalf Of </b>Douglas Scott<br>
<b>Sent:</b> Tuesday, September 17, 2024 9:51 AM<br>
<b>To:</b> WSBA Real Property Listserv <<a href="mailto:wsbarp@lists.wsbarppt.com">wsbarp@lists.wsbarppt.com</a>><br>
<b>Subject:</b> [WSBARP] Stepped up basis<o:p></o:p></span></p>
</div>
<p class="MsoNormal"><o:p> </o:p></p>
<div>
<p class="MsoNormal">Unmarried (non-marital union) couple owned real estate as joint tenants with the right of survivorship. Man dies and the woman gets the property. Is there a stepped up basis for the woman? <o:p></o:p></p>
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<p class="MsoNormal"><br clear="all">
<o:p></o:p></p>
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<p class="MsoNormal"><b><span style="font-size:13.5pt;font-family:"Open Sans",sans-serif;color:#6E8F94">DOUGLAS W. SCOTT</span></b><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Georgia",serif">Rainier Legal Advocates|LLC</span><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Georgia",serif">465 Rainier Blvd. N., Suite C </span><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Georgia",serif">Issaquah, Washington 98027 </span><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Georgia",serif">425.392.8550 (tel)</span><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Georgia",serif">425.392.2829 (fax)</span><span style="font-family:"Arial",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"><a href="http://www.rainieradvocates.com/" target="_blank"><span style="font-family:"Georgia",serif;color:#1155CC">www.rainieradvocates.com</span></a><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif"><o:p> </o:p></span></p>
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