1. Betty and Peter bought a home for $800,000 to be used as their residence. Betty paid $560,000 and Peter paid $240,000. When Betty died in January of 2020, the Fair Market Value (FMV) of the house was $1,400,000.

Betty and Peter are friends, and they took title as joint tenants

a. How much is included in Bettys estate? Please show your calculations.

b. What is Peter new basis? Please show your calculations.

c. The attorney dealing with Bettys estate realized that Betty left a will stating that her children are to inherit her half of the property that she held jointly with Peter. Please indicate who will inherit Bettys share of the property and explain why.