New Jersey Administrative Code
Title 18 - TREASURY - TAXATION
Chapter 26 - TRANSFER INHERITANCE AND ESTATE TAX
Subchapter 8 - ASSESSMENT AND VALUATION
Section 18:26-8.10 - Life estate in real property held by the entirety
Universal Citation: NJ Admin Code 18:26-8.10
Current through Register Vol. 56, No. 18, September 16, 2024
(a) When real property is devised or transferred to spouses/civil union couple/domestic partners as tenants by the entirety each having a vested life estate in common with the other for their joint lives with a vested estate in fee in the entire remainder subject to defeasance, as to the one first dying, the value of such property for New Jersey transfer inheritance tax purposes, is ascertained as follows:
1. A life estate is computed on the basis of the
lesser life expectancy of the devisees or grantees and the value so determined is
considered as immediately vested in equal shares, and subject to tax
accordingly.
2. The remainder is treated
as contingent and a compromise tax is suggested in accordance with
N.J.S.A.
54:36-6, based upon the following alternatives:
i. The tax chargeable if the devisee or grantee
against whom the lower rate of tax would apply survives;
ii. The tax chargeable if the devisee or grantee
against whom the higher rate of tax would apply survives; or
iii. The tax chargeable determined on the basis
that the devisees or grantees will share the remainder equally as the result of a
sale of the real property or the entry of a judgment of divorce.
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