What amount of the mobile home property will be included

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Reference no: EM131900118

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Robert and Helen are married. Helen purchased a doublewide mobile home in which they resided for $40,000. Helen worked full time and was able to purchase the property from her earnings while she was married to Robert. They took title as ?"joint tenants, with right of survivorship."? Desperate for money, Robert moves to New Orleans, Louisiana to find work. Upon arriving in New Orleans, Robert falls in love with a Voodoo woman named Phyllis and changes his name to Roberto. He writes to Helen to inform her of his new found love. Devastated, Helen screams "Roberto is the devil!" and decides to retitle the mobile home property with her son Bobby as "jointly with rights of survivorship". Unbeknownst to Helen and before she changes the title on the mobile home, Roberto chokes on a beignet and dies. At the time of Roberto's death the mobile home is valued at $70,000.

Questions

For questions 2 thru 4 assume Roberto and Helen reside in a non-community property state:

2.) What amount of the mobile home property will be included in Roberto's estate for estate tax purposes?

3.) What is Helen's tax basis in the mobile home at the time of Roberto's death?

For questions 5 thru 7 assume Roberto and Helen reside in a community property state:

5.) What amount of the mobile home property will be included in Roberto's estate for estate tax purposes?

6.) What is Helen's tax basis in the mobile home at the time of death?

Questions 8 thru 10 relate to Helen's retitling of the asset with Bobby. Assume that the property is in a non-community property state.

9.) Shortly after Helen retitles the mobile home to include Bobby, Bobby breaks a person's neck playing "foosball." If Bobby is sued for damages and loses will liability attach to Helen's portion of the property?

10.) About a year after Roberto dies, Helen dies of a broken heart (i.e. a heart attack). What amount of the mobile home property will be included in Helen's estate for estate tax purposes? Assume the Mobile home's value is now $72,000.

For questions 11 thru 13, assume that instead of retitling the mobile home with her son Bobby as "jointly with rights of survivorship", Helen decides to convey her interest in the mobile home to Bobby where the conveyance in deed contains the language of "in fee, reserving a life estate to the grantor."

12.) Will the annual gift tax exclusion apply here? Explain.

13.) Now assume that Helen remarries and Helen's new husband builds a methamphetamine (meth) lab in the mobile home. The chemicals are deteriorating the condition of the mobile home. What can Bobby do to preserve his interest?

Reference no: EM131900118

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