Jesse dies intestate (i.e., without a will) in May year 1. Jesse’s major asset is a tract of land. Under applicable state law, Jesse’s property will pass to Lorena, who is his only child. In December year 1, Lorena disclaims one-half of the property. In June year 2, Lorena disclaims the other half interest. Under state law, Lorena’s disclaimer results in the property passing to Arnold (Lorena’s only child). 

The value of the land (in its entirety) is as follows: $2 million in May year 1, $2.1 million in December year 1, and $2.2 million in June year 2. Discuss the transfer tax ramifications of these transactions.