Question

Anna owned a home with her sister as joint tenants with the rights of survivorship. The home was inherited by Anna and her sister from their mother. Anna died and is survived by her sister. Which of the following statements is correct? a. The full value of the home must be included on Part 2 of Schedule E, minus any consideration that the sister has furnished(and can prove) b. The full value of the home must be included on Part 2 of Schedule E regardless of any consideration the sister has furnished c One-half of the value of the home must be included on Part 2 of Schedule E d. One-half of the value of the home must be included on Part 2 of Schedule A

Answer 1

Answer:

D.one-half of the value of the home must be included on Part 2 of Schedule A

Explanation:

The rationale for this is that passed and she was  survived by her sister as a result only one-half qualifies of the jointly held home qualifies to be included on Part 2 of Schedule A

Answer 2

Answer:

d. One-half of the value of the home must be included on Part 2 of Schedule A

Explanation:

Justify incorrect answer:  

It is not correct to take the full value of home to be included in Part 2 of schedule E. Dwelling unit alone should be taken.

Owning part interest only should be included if partly owned. It is irrespective of consideration furnished by sister.

One half of home must be included. But it should not be included in part 2 of schedule A. Schedule A consists of public charity status.

Therefore, full value of home if partly owned, regardless of consideration, part 2 of schedule A is incorrect.

Determine the correct statement:

If only part of the property is owned or part interest is bared by a taxpayer, it should alone be reported. Income and expense is reported under schedule E. Any amount paid for repairs or depreciation can be deducted.

Therefore, one half of the home value should be included on part 2 of schedule E.