Jointly owned property may not be subject to valuation discounts.

• Jurisdiction: United States
• Author: Dunn, Lee
• Date: 01 April 1999

In preparing Form 706, U.S. Estate (and Generation-Skipping Transfer) Tax Return, a practitioner is often faced with the dilemma of determining the valuation of certain assets in a decedent's gross estate. When a decedent owns assets such as interests in real property or shares of closely held stock, the gross value of these interests may need to be adjusted for factors affecting value (such as discounts for minority interests, fractional interests and lack of marketability) to determine the asset's fair market value.

Estate of Young, 110 TC 297 (1998), addressed whether discounts for fractional interests or lack of marketability (which have been allowed for tenancy in common and community property interests) should be applied to a decedent's property held in joint tenancy with right of survivorship.

In Young, the decedent and his wife had owned real property as joint tenants with right of survivorship in a community property state. On the decedent's estate tax return, the estate had excluded...