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Subject:  Re: Survivor's Cost Basis Date:  12/7/2000  2:13 PM
Author:  criser Number:  42609 of 123001

No need to panic until you know what your state's law says about joint ownership of securities.

The answer depends on state law. If Dad adds son's name to a brokerage account or stock certificate as a joint tenant with right of survivorship and if state law says that one of two joint tenants with right of survivorship have the right unilaterally to partition the stockholding 50/50 (e.g., force the custodian to split the account 50/50 between Dad and son, with son being able to do whatever he wants with his 50%), even though that joint tenant contributed less than 50% of the purchase price (e.g., zero), then, yes, a gift was made from Dad to son equal to 50% of the value at the time the gift was made and son's basis in that 50% is the market value on the date of the gift. The other 50% would be stepped up at the time of Dad's death.

If state law sa