Final answer:
Upon John's death, the entire property value of $350,000 transfers to Jean under tenancy by the entirety and is not included in John's gross taxable estate due to the unlimited marital deduction provision. No estate tax is due as it is below the exemption amount.
Step-by-step explanation:
Under the concept of tenancy by the entirety, which applies to some married couples, when one spouse dies, the property automatically goes to the surviving spouse without passing through probate. Therefore, in the case of Jean and John Simmons, when John dies, the entire property value transfer to Jean would fall under the unlimited marital deduction provision.
Considering the existing estate tax laws, as long as the estate value does not exceed the threshold for estate tax which was $5.43 million in 2015 no estate tax would be due on the transfer of the home's value to the surviving spouse. In the case of John's estate, the value is well below this threshold at $350,000. Thus, the correct answer is that none of the home's value will be counted in his gross taxable estate because it goes directly to his spouse.
Furthermore, since tenancy by the entirety is a form of joint ownership specific to married couples, the decedent's interest in the property is extinguished upon death, and the survivor assumes full ownership. The marital deduction in the U.S. tax code ensures that assets passing directly to a surviving spouse are not subjected to estate tax.