Question

Kit, Amy, and Aaron acquire a piece of land, ownership listed as tenants in common. Of the total purchase price of $1,000,000, Kit and Amy contributed $200,000 each and Aaron contributed $600,000. When the property is worth $1,600,000, Kit dies. What amount will be included in Kit's gross estate

Answer 1

Answer:

$320000

Explanation:

Given: Purchase price of land= $1000000.

           Kit and Amy contributed= $200000 each.

           Aaron contributed= $600000.

           New value of property= $1600000.

First finding the share of each partner in the property.

As we know, contribution made by Kit, Amy and Aaron are $200000, $200000, and $600000 respectively.

∴ ratio of share of each partner in property are $2:2:6$

Hence, Kit, Amy and Aaron´s share is $2:2:6\ respectively$.

Now, calculating the amount, which will be included in Kit´s gross estate.

As given, current worth of property is $1600000.

Amount will be included in Kit´s gross estate= $\ 1600000\times \frac{2}{10}$

∴ Amount will be included in Kit´s gross estate= $\ 320000$

Hence, Kit´s gross estate value is $320000.