Cody and Reese were married years ago and had one child, Amber. Cody and his longtime friend, Kandi, were recently flying in Kandis new plane. For a brief period Kandi was distracted and lost control of the plane. Unfortunately, the plane crashed and Kandi died instantly and Cody died a few days later as a result of the injuries sustained during the crash. When Cody died he and Reese owned the following property: Home valued at $1,000,000 held tenancy by the entirety. Car 1 valued at $15,000 held fee simple by Cody. Car 2 valued at $20,000 held Joint Tenancy with Rights of Survivorship by Cody and Amber. Inherited diamond ring collection valued at $3,000,000 held fee simple by Reese. Boat valued at $500,000 held tenancy in common by Cody and Amber. Life Insurance Policy 1 on Reeses life, owned by Cody. The fair market value of the policy was $100,000 and the death benefit was $200,000. The beneficiary is Amber. Life Insurance Policy 2 on Codys life, owned by Cody. The fair market value of the policy was $80,000 and the death benefit was $600,000. The only beneficiary is Kandi. IRA account valued at $2,500,000 owned by Cody with Amber as the beneficiary. Irrevocable Trust by Cody for the benefit of Amber created five years ago. The trust is valued at $400,000, and Amber is the beneficiary at Codys death.

$100,000Cody and Kandi paid $100,000 for a vacation home held in JTWROS. Cody put up $75,000, and Kandi put up $25,000. When Kandi dies, how much will the IRS try to include in his gross estate?

$0

$25,000

$50,000

$75,000

$100,000