C3 Types of Property Interests Flashcards

C3 Types of Property Interests Flashcards In a sole ownership, the joint tenants must agree to sever.a. True b. False False What is tenancy in common?Its a type of ownership where two people share ownership interest in property. The portion they own is included in the gross estate.What is a term interest?An interest in property that grants the holder the right to use the property for a definite term (number of years). At the end of the term the property is transferred to the remainderman.True / FalseBecause of the implied right of survivorship, only related parties can enter into a joint tenancy.False. JTWROS can be for anyone.Examples of real property are land, automobiles, and stocks.a. True b. False False True / FalseThere is an implied right of survivorship with community property.False.Distinguish between real property, tangible personal property and intangible property.Real property includes land, buildings, trees and fixtures.Tangible personal property is physical and can be moved.Intangible personal property is property is without substance such as stocks, bonds, patents, copyrights, cryptocurrencies.True / FalseWhen a couple moves from a common law (separate property) state to a community-property state, all of their previously owned separate property automatically becomes community property.False. They have to make an election to make the property community property.What is an automatic survivorship feature? It's a feature of certain types of ownership (like JTWROS) that automatically transfers to another individual upon death.What is a life estate?An interest in property that ceases upon the death of the owner of the interest and provides the owner of such interest with a right to the income or the right to use property, or both.True / FalseCommunity property is a regime under which married individuals own an equal undivided interest in all property accumulated, utilizing either spouse's earnings during their marriage.True.In the U.S. legal system, what are the three categories of property?

• Real property2. Tangible personal property3. Intangible

personal property True / FalseYou can sever a Tenancy by the Entirety without consent of the other owner. Why/Why not?False. You cannot do this because this type of ownership requires consent from both parties.True / FalseQuasi-community property is property that was community property before one spouse donated his interest

to the other spouse.False. This is when property that was in a common law state ( separate property) is moved to a community

property state. In this case it is considered Quasi-community property.A tenancy in common can be severed without the permission of all of the tenants in common.a. Trueb. False True Sole property owned by a decedent is included in the owner's gross estate for federal estate tax purposes.a.Trueb. False True What is legal vs equitable onwership?Legal ownership implies that a party has the title to the property. The legal owner has rights, duties, responsibilities and privileges associated with the property.Equitable ownership is the economic right to enjoy the benefits of the property.If Tom purchases a piece of real estate titled JTWROS shared 50/50 with his wife, but his wife made no contribution how much would be included in Toms gross estate?50%. This is considered a gift to his wife, but the unlimited marital deduction prevents any gift tax.

What will Kyle's basis be after the following occured:Anna

and Kyle live in a separate property state.They bought a vacation home in a community property state for $100,000 in 2000 and it is owned JTWROSIn 2002 they moved into their vacation home.In 2003 Anna dies, leaving the leftover estate to Kyle.The value at the date of Anna's death was

$300,000.

Because they own the property in a separate property state, Anna has a basis of $150,000 at the date of her death, 1/2 of the property. Kyle's basis remains at the original basis of $50,000 (1/2 of $100,000). At anna's death because the property has a survivorship feature, it passes to Kyle with Anna's new basis of $150,000 and his basis of $50,000. Thus, his total basis is $200,000. He could have increased his basis by declaring it community property.This would adjust both Anna's and Kyle's basis to the FMV of the entire property.True / FalseCommunity property may be dissolved by death, divorce, or by agreement between the spouses.True.Tenancy in common provides an automatic right of survivorship, thus avoiding the probate process.a. Trueb.False False True / FalseProperty acquired by gift, by inheritance, or before the marriage can retain its separate property status even in a community-property state.True.Of the following types of ownership, which is available for married couples?1. Tenancy by the entirety2. Tenancy in common3. JTWROS4. Tenants by marriage 1,2,3 If Tom purchases a piece of real estate titled JTWROS shared 50/50 with his son, but his son made no contribution to the real estate, how much would be included in Toms estate?100%. This is due to the contribution rule. This does not apply What is a difference between an usufruct and a life estate?An usufruct will be terminated upon life AND upon remarriage. A life estate is only terminated upon life.True / FalseTenancy by the Entirety (TE) is only available to married couples True

What is joint tenancy?"Undivided interest in entire propertyUpon death; property goes to other joint tenants" What does it mean when property is owned "fee simple"?This means that the owner has the complete rights to the property.True/FalseTom created a joint checking account for himself and his cousin, Bill, with a $50,000 deposit. Because Bill has every right to withdraw the money at anytime, for federal gift tax purposes Tom has made a gift to Bill.False. Until Bill uses a portion of the money, he has not been given a gift for federal tax purposes.What is the alternate valuation date?It's an alternate date of valuation (limited to 6 months after) death to recalculate FMV of an estate.Tenancy in common is only available for married couples.a.Trueb. False False What is community property?It is where each spouse shares 50% of property acquired within the community property state.True / FalseThe actual contribution rule does not apply to married persons where the married couple owns property

JTWROS.

True. In a marriage it doesn't matter how much a spouse contributes, ownership is 50/50. Outside a marriage it is based on the % contributed.True / FalseA usufruct is similar to the life estate but only applies in Louisianna.True. This is the only state that has a usufruct interest.True / FalseIf separate property is commingled with community property to the extent that it cannot be traced as separate, the property is automatically deemed community property.True.What are three common types of partial ownership interests?Life EstateUsufructTerm Interest Property owned as tenancy by the entirety does not pass through probate because of the automatic right of survivorship.True. TE and JTWROS both avoid probate.

What will anna's basis be after the following occured:Her

and her husband bought a home 30 years ago for 300,000.Her husband dies and leaves her all the property.The Home is valued at 1,000,000 today.They live in a community property state.Her basis will originally be $150,000.When her husband dies, her basis will step-up to $500,000.If her husband gives her his portion of the house, her basis will be

1,000,000.

Difference between gross estate and probate estate?Your gross estate is simply the amount of property/assets that are included in your estate when you die.If it is included in the probate estate it would be subject to the state probate process.Which of the following would not meet the ascertainable standard requirement if it appeared in a trust document?a.Health.b. Education.c. Maintenance.d. Comfort.92

• Comfort. HEMS is allowed. S stands for support

True/ FalseTenancy by the entirety is a tenancy in common that can only occur between a married couple.FalseIt is not a tenancy in common, but it can only occur between married couples.If a couple own property under Tenancy by the Entirety, and Spouse A pays 80%, and spouse B pays 20%, how much would be included in spouse B's gross estate if she