The following were related to estate tax return of decedent M who passed away in Dec 2004.  Taxable estates was about $ 220,000.

1)  Condo

In 2000, M added her son B on title of her condo as joint tenants with rights of survivorship when she refinanced the condo.  B did not contribute to the costs of the condo or mortgage payments or upkeep expenses.  M paid all the expenses and took all the deductions.

In 2003, M signed quitclaim of her 50% joint tenant interest to another son V.  The quitclaim was recorded in 2004.  M continued to live in the condo till her death.  She continued to pay for all condo related expenses and took all the deductions.  She did not pay any rent to V.

I think she retained a life estate when she gifted her 50% joint tenancy to V and so that 50% interest should be includible in gross estate under sec 2036 and receive step up treatment.  If her gross estate owned this 50% interest, I think the other half should also be included in her gross estate since the other non-spouse joint tenant did not contribute any cost of the property.  So I think even-though the title of the house was not in the decedent's name at her death, I should still include the entire house in the Form 706.  Actually, the reason we want to file a Form 706 for the nontaxable estate was to show the step up basis in the house.  Should I report 50% on schedule E and 50% on schedule G?

Was there a completed gift when joint tenancy was formed with B in 2000?

Was there a completed gift when quitclaim to V was signed in 2003 or recorded in 2004?

No prior gift tax returns were filed.  Do executor have to file these back gift tax returns for the decedents?  These gifts were higher than annual exclusion but covered by the lifetime exemption.

2) Broker Account

Decedent M had a joint broker account with son V.  Several months before M's death, V transferred all the assets from the joint account with value of about $60,000 to his own account.  Per V, he still intends to split the assets with his 3 siblings.  It seems to me that there was a completed gift from M to V when V withdrew the assets.  So I do not think these assets will be included in gross estate and will not get step up basis.  I am still going to include the value of these assets on line 4 of Form 706.  If the value is reported on the 706, does the executor still need to file the delinquent 2004 gift tax return for the decedent.  Will there be gifts form M to his siblings when he give them a share of these assets?

3) Pecuniary bequests

M's Will was executed in 2003.  In her Will, she bequeath to each of her 6 grandchildren cash or equivalent property value of $5000.  She bequeath to her 4 children in equal shares all personal and real property and financial assets.  The Will also states that "if I do not possess or own any property listed above on the date of my death, the bequest of that property shall lapse.  She bequeath all of the rest, residue, and remainder of her estate to her children per share.

The estate only has a condo and some personal effects.  There are no liquid assets like bank or broker accounts.  Should the 6 grandchildren still get the $5000 cash each?  One more grandchild was born in 2004.  He was not listed in the will that was executed in 2003.  Should he get $5000 also?