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Determining how much joint property is in a spouse's estate

Article Abstract:

IRC 2040 describes how property, held in joint tenancy with survivors rights, is valued. However, the implementation of the regulation has become confusing because of several amendments which affect property held prior to 1977 by persons who die after 1981. In Gallenstein, the 6th Circuit Court denied the IRS position that a 1981 amendment implicitly repealed a 1976 amendment. The decision established that a survivor may elect a step-up in basis on 100% of the property, rather than 50% as in the IRS position, offsetting the gain should the property be sold by the survivor.

Decedents' estates, Valuation

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Full stepped-up basis for pre-1977 joint property

Article Abstract:

The Tax Court in Hahn v. Commissioner found against the IRS position, that a joint tenant's estate had a 50% stepped-up basis under IRC 2040(b)(1) due to 1981 amendments to section 2040. The petitioners argued successfully that the step-up basis should be 100% since the joint tenancy property was created prior to 1981 to receive a 100% stepped-up basis. The tax court found that a 1981 amendment to section 2040 did not change the effective date of section 2040(b)(1).

United States

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Economic performance rules contain elections for real estate developers

Article Abstract:

IRC Section 461(h) and Revenue Procedures 92-28 and 92-29 provide important guidance for real estate developers and investors and accrual method taxpayers generally. This part of the Code describes the Economic Performance Test and defines when economic performance occurs and how it must be accounted. Procedures 92-28 and 92-29 define when and how certain elections may be made concerning improvement costs for real estate developments.

Real estate investment, Real estate investments, Real estate development

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