Honorable Robert S, Ca1ver.t   0Di.nior-l
                                       No. M-88
ComptrcL:er of Pdbiic
  Accounts                     Re:   Taxability for Inheritance
Capitc3.Station                      Tax pu;*pCSeS   of succession
Austin, Texas 7871.X                 t@ real prCperty    by surviv-
                                     ing joint tenant under sub-
Dear Mr. Ca1ver.t:                   mitted facts.
       We quote the following excerpt from your letter request-
ing the opinion of this Office on the above captioned subject:
               9,
                . . 0 [Mrs. X] died testate, a
          resident of Dallas County, on February
          6, 1966, and the proper repcrts have
          been submitted to this Department for
          an inheritance tax clearance.
               II      [ x ] and his wife,
          [Mrs. Z?];'eAteredinto a jcir:ttei:a&
          agreement in 1959 wit!3 ~ D D [Miss rj
          in ccncectiun with the o-w??ershI~pof a
          house and lot located i;IDallas County,
          Texas 9 having a value of $19,500.00.
                 [ X ] predeceased his wife, . , .
          tl& : X],and .    . [Miss Y] is now the
          sole SU~~V~.VC~oh this Jc,int Tenancy
          Agreement,.
               "Your Department has passed on a
          similar question in Opkion No. WW-262,
          and we wish to be advised whether gr not
          this opinion ,is applicable in ifniscase,




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Honorable Rcbcrt S. Calve&,   Page 2 (N-88)


       The ps:?tine;;t
are the foIlewing:
               !!,;.
                   *

               "Now,
          premzses and the sum of One Dollar ($1.00) and
          other gicd and -zal:lab>ecc;isaid.r:~~i;icrs
                                                    by each
          of the .unders;gnedparties heretc to the other
          in hand paid? receipt .wiiex?cf’ is hereby ackncw-
          ledged by each party and -thefl:rtherconsidera-
          tion of the ml.tual
                       u1     benefits ae.c?Une
                                            L     to the
                                                LB'
          undersigned, and parties hereto, it is agreed
          as follows:
Honorable Robert S. Calvert, Page 3 (K-08)



considered, the surviving joint tenants did not owe any inheri-
tance tax upon the interest received at the death of a joint
tenant. Those facts were that a third party, by deed, created
a joint tenancy with right of survivorship in four named parties,
In view of the fact that the joint tenants had not by agreement
created the joint tenancy with right of survivorship, we held
that there was no taxable succession to the property under the
provisiona of the then Article 7117, Volume 20, Vernon's Civil
Statutes, which imposed an inheritance tax upon property pass-
ing by "deed, grant, sale or gift made or intended to take effect
in possession or enjoyment after the death of the grantor or
donor . . . ."
       This Office has held that where the joint tenancy with
right of survivorship is created by an express agreement between
the parties, at the death of a joint tenant the passing of his
or her interest is subject to inheritance tax. In Attorney
General Opinion No. C-12 (1963), it was held that one-half of
the value of United States government bonds of the cc-ownership
type, purchased with community funds and payable to husband or
wife, was subject to an inheritance tax upon the death of the
husband. This opinion contains a rather lengthy analysis of the
treatment for inheritance tax purposes of bonds of this type.
       In this case, we are not confronted with the effect of
the agreement submitted to us in so far as it purports tc
effectuate a partition of the community interest of the spouses,
as was the case under consideration in Attcrney General Opinion
No. WV-1013 (1961). Under the express terms of the submitted
agreement, the spouses1 former interest in the land in question,
as a joint tenant with right of survivorship, was specifically
required upon the death of the last of the spouses, to pass to
the now sole survivor of the joint tenancy. We do.not think
that there can be any valid distinction fcr inheritance tax
purposes because the property under consideration is real prop-
erty rather than personalty. You are therefore advised that
upon the death of the decedent in this case, there was a taxable
succession to he.rthen one-half interest in the joint tenancy


                 .


l/   Presently carried as Article 14.01, Ch. 14, Title 122A,
     Tax.-Gen., V.C.S.


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                                                                  ,




Honorable Robert S.   cd~cd,       page 4 (~-88)


by virtue of the provision above quoted, which taxes transfers
intended to take effect in possess.
                                  ion or enjoyment at the death
of the decedent.


                      S UMMA       R Y

               Where spouses and third party created
       by express contract a valid joint tenancy with
       right of survivorship and the spouses predeceased
       the third party joint tenar,t,under the provisions
       of Article 14.01, Ch. 14, Title 122A, Tax.-Gen.,
       V.C.S., an inheritance tax accrued upon the pass-
       ing of the surviving spouse's interest at the
       time of the death of said surviving spouse.




Prepared by Marietta McGregor Payne
Assistant Attorney General
MMP/fb
                                                   .
APPROVED:
OPINION COMMITTEE
Hawthorne Phillips, Chairman
W. V. Geppert, Co-Chairman
Ralph Rash
Arthur Sandlin
W. E. Allen
Pat Bailey
STAFF LFGAL ASSISTANT
A. J. Carubbi, Jr.

                 .




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