[Code of Federal Regulations]
[Title 26, Volume 14]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR20.2040-1]

[Page 325-326]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 20_ESTATE TAX; ESTATES OF DECEDENTS DYING AFTER AUGUST 16, 
1954--Table of Contents
 
Sec.  20.2040-1  Joint interests.

    (a) In general. 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 person or persons with right of 
survivorship, as follows:
    (1) To the extent that the property was acquired by the decedent and 
the other joint owner or owners by gift, devise, bequest, or 
inheritance, the decedent's fractional share of the property is 
included.
    (2) 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 
owner or owners. See Sec.  20.2043-1 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 valuation date described in section 2032 which the 
consideration in money or money's worth furnished by the other joint 
owner or owners bears to the total cost of acquisition and capital 
additions. In determining the consideration furnished by the other joint 
owner or owners, there is taken into account only that portion of such 
consideration which is shown not to be attributable to money or other 
property acquired by the other joint owner or owners from the decedent 
for less than a full and adequate consideration in money or money's 
worth.

The entire value of jointly held property is included in a decedent's 
gross estate unless the executor 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 owner or 
owners by gift, bequest, devise, or inheritance.
    (b) Meaning of ``property held jointly''. Section 2040 specifically 
covers property held jointly by the decedent and any other person (or 
persons), property held by the decedent and spouse as tenants by the 
entirety, and a deposit of money, or a bond or other instrument, in the 
name of the decedent and any other person 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

[[Page 326]]

the property by right of survivorship 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 person (or persons) as tenants in common.
    (c) Examples. The application of this section may be explained in 
the following examples in each of which it is assumed that the other 
joint owner or owners survived the decedent:
    (1) 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;
    (2) If the decedent furnished a part only of the purchase price, 
only a corresponding portion of the value of the property is so 
included;
    (3) If the decedent furnished no part of the purchase price, no part 
of the value of the property is so included;
    (4) If the decedent, before the acquisition of the property by 
himself and the other joint owner, gave the latter a sum of money or 
other property which thereafter became the other joint owner'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;
    (5) If the decedent, before the acquisition of the property by 
himself and the other joint owner, 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 owner'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 owner did furnish is included in the 
decedent's gross estate;
    (6) If the property originally belonged to the other joint owner and 
the decedent purchased his interest from the other joint owner, only 
that portion of the value of the property attributable to the 
consideration paid by the decedent is included;
    (7) 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
    (8) 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.