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Which of the following best describes the concept of "phantom estate" for estate tax purposes?

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A phantom estate exists only when a property interest has no owner, thereby triggering application of the state's escheat provisions.

A phantom estate is created when the decedent fails to name an executor in his will.

Internal Revenue Code provisions such as sections $2035,2040,2042,2036,2037,$ and $2038$ which require the value of a decedent's gross estate under section $2031$ to include the value of property interests that will not pass through his or her probate estate.

The term "phantom estate" describes the ghostly existence of the decedent.

Question $18$

Aunt Agatha gave her beach cottage to her nephew, Bertie Wooster, but as a result of an understanding with him she continued to use the cottage free of any rent for the summer of each year until her death, which occurred eight years after the gift. What is the most likely estate tax result?

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Although it is probable the full value of the beach cottage is includible in her gross estate under section $2036($a$)(1),$ there may be an argument for excluding some or all of the value if Aunt Agatha did not have exclusive year round use and possession of the cottage after her conveyance.

The full value of the beach cottage at her death will be included in her gross estate under section $2040$ since her conveyance created a joint tenancy with right of survival with Bertie.

One$-$half the value of the beach cottage at her death will be included in her gross estate under section $2036($a$)(1).$

The full value of the beach cottage at her death is included in her gross estate under section $2035.$

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