## Facts

- Mary Concordia owned a house on Western Avenue, where she lived with her sister until the sister’s death.
- Concordia and her sister also owned a house on Bradley Lane, which the sister managed as a rental property.
- When Concordia’s sister died, Concordia became the sole owner of both the Western Avenue residence and the Bradley Lane rental property.
- Concordia did not want to live alone and, as part of a coordinated family plan involving her niece (Mrs. McReady) and the niece’s husband (Mr. McReady), made several arrangements:
  - Concordia conveyed the Western Avenue house to herself and Mrs. McReady as joint tenants with right of survivorship.
  - The McReadys’ daughters lived in the Western Avenue house and cared for Concordia’s dogs there.
  - Mr. McReady assumed responsibility for managing the Bradley Lane property as a rental (including rental-related oversight).
  - Concordia moved in with the McReadys and lived with them until her death.
- After Concordia’s death, her estate filed an estate tax return that included only 50% of the value of the Western Avenue house in the gross estate.
- The IRS determined that the full value of the Western Avenue house was includible in the gross estate and issued a notice of deficiency.
- The estate petitioned the U.S. Tax Court to challenge the deficiency determination.

## Issues

1. Whether, for federal estate tax purposes, the decedent’s gross estate must include 100% of the value of the Western Avenue residence that was held in joint tenancy with right of survivorship with the decedent’s niece, or only 50% based on the niece’s claimed ownership interest.

## Decision

- The Tax Court held that the full value of the Western Avenue property was includible in the decedent’s gross estate.
- The court sustained the IRS’s deficiency determination on the joint-tenancy inclusion issue.

## Legal Principles

- Jointly held property with right of survivorship is generally included in the decedent’s gross estate except to the extent the survivor can show that the survivor supplied consideration for the property (or for the portion claimed to be excluded).
- The estate bears the burden of proving facts that reduce inclusion, including proof of the survivor’s consideration and the amount of any such contribution.
- For purposes of reducing inclusion of jointly held property, consideration must be shown in a manner that is measurable and traceable; informal family arrangements, standing alone, are typically insufficient to establish a consideration-based reduction in the amount included.

## Conclusion

Estate of Concordia v. Commissioner addresses estate-tax inclusion of a residence retitled into joint tenancy with a niece shortly before death as part of a family living and caregiving arrangement. The Tax Court determined that the estate could not limit inclusion to 50% because it did not establish that the surviving joint tenant provided consideration sufficient to exclude any portion under the joint-interest rules, so the full value of the Western Avenue property was included in the gross estate.


Estate of Concordia v. Commissioner, 84 T.C.M. (CCH) 254 (2002)