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Section 2032: Alternate valuation Previous Next Document Info Printer

Internal Revenue Code
Sec. 2032: Alternate valuation
(a)

General

The value of the gross estate may be determined, if the executor so elects, by valuing all the property included in the gross estate as follows:

(a)(1)

In the case of property distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent's death such property shall be valued as of the date of distribution, sale, exchange, or other disposition.

(a)(2)

In the case of property not distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent's death such property shall be valued as of the date 6 months after the decedent's death.

(a)(3)

Any interest or estate which is affected by mere lapse of time shall be included at its value as of the time of death (instead of the later date) with adjustment for any difference in its value as of the later date not due to mere lapse of time.

(b)

Special rules

No deduction under this chapter of any item shall be allowed if allowance for such items is in effect given by the alternate valuation provided by this section. Wherever in any other subsection or section of this chapter reference is made to the value of property at the time of the decedent's death, such reference shall be deemed to refer to the value of such property used in determining the value of the gross estate. In case of an election made by the executor under this section, then -

(b)(1)

for purposes of the charitable deduction under section 2055 or 2106(a)(2), any bequest, legacy, devise, or transfer enumerated therein, and

(b)(2)

for the purpose of the marital deduction under section 2056, any interest in property passing to the surviving spouse, shall be valued as of the date of the decedent's death with adjustment for any difference in value (not due to mere lapse of time or the occurrence or nonoccurrence of a contingency) of the property as of the date 6 months after the decedent's death (substituting, in the case of property distributed by the executor or trustee, or sold, exchanged, or otherwise disposed of, during such 6-month period, the date thereof).

(c)

Election must decrease gross estate and estate tax

No election may be made under this section with respect to an estate unless such election will decrease -

(c)(1)

the value of the gross estate, and

(c)(2)

the sum of the tax imposed by this chapter and the tax imposed by chapter 13 with respect to property includible in the decedent's gross estate (reduced by credits allowable against such taxes).

(d)

Election

(d)(1)

In general

The election provided for in this section shall be made by the executor on the return of the tax imposed by this chapter. Such election, once made, shall be irrevocable.

(d)(2)

Exception

No election may be made under this section if such return is filed more than 1 year after the time prescribed by law (including extensions) for filing such return.

SOURCE

    (Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 91-614, title I,
    Sec. 101(a), Dec. 31, 1970, 84 Stat. 1836; Pub. L. 98-369, div. A,
    title X, Secs. 1023(a), 1024(a), July 18, 1984, 98 Stat. 1030; Pub.
    L. 99-514, title XIV, Sec. 1432(c)(1), Oct. 22, 1986, 100 Stat.
    2730.)

MISC1

                                AMENDMENTS
      1986 - Subsec. (c)(2). Pub. L. 99-514 amended par. (2) generally.
    Prior to amendment, par. (2) read as follows: "the amount of the
    tax imposed by this chapter (reduced by credits allowable against
    such tax)."
      1984 - Subsec. (c). Pub. L. 98-369, Sec. 1023(a), added subsec.
    (c). Former subsec. (c) redesignated (d).
      Subsec. (d). Pub. L. 98-369, Sec. 1024(a), substituted "Election"
    for "Time of election" in heading, designated existing text as par.
    (1), inserted heading "In general", substituted "shall be made by
    the executor on the return of the tax imposed by this chapter" for
    "shall be exercised by the executor on his return if filed within
    the time prescribed by law or before the expiration of any
    extension of time granted pursuant to law for the filing of the
    return", inserted sentence providing that an election, once made,
    is irrevocable, and added par. (2).
      Pub. L. 98-369, Sec. 1023(a), redesignated subsec. (c) as (d).
      1970 - Pub. L. 91-614 substituted "6 months" for "1 year" in four
    places and substituted "6-month" for "1-year".

                     EFFECTIVE DATE OF 1986 AMENDMENT
      Amendment by Pub. L. 99-514 applicable to generation-skipping
    transfers (within the meaning of section 2611 of this title) made
    after Oct. 22, 1986, except as otherwise provided, see section 1433
    of Pub. L. 99-514, set out as an Effective Date note under section
    2601 of this title.

                     EFFECTIVE DATE OF 1984 AMENDMENT
      Section 1023(b) of Pub. L. 98-369 provided that: "The amendments
    made by subsection (a) [amending this section] shall apply with
    respect to estates of decedents dying after the date of the
    enactment of this Act [July 18, 1984]."
      Section 1024(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,
    Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
      "(1) In general. - The amendment made by subsection (a) [amending
    this section] shall apply to estates of decedents dying after the
    date of the enactment of this Act [July 18, 1984].
      "(2) Transitional rule. - In the case of an estate of a decedent
    dying before the date of the enactment of this Act [July 18, 1984]
    if -
        "(A) a credit or refund of the tax imposed by chapter 11 of the
      Internal Revenue Code of 1986 [formerly I.R.C. 1954] is not
      prevented on the date of the enactment of this Act by the
      operation of any law or rule of law,
        "(B) the election under section 2032 of the Internal Revenue
      Code of 1986 would have met the requirements of such section (as
      amended by this section and section 1023) had the decedent died
      after the date of enactment of this Act, and
        "(C) a claim for credit or refund of such tax with respect to
      such estate is filed not later than the 90th day after the date
      of the enactment of this Act,
    then such election shall be treated as a valid election under such
    section 2032. The statutory period for the assessment of any
    deficiency which is attributable to an election under this
    paragraph shall not expire before the close of the 2-year period
    beginning on the date of the enactment of this Act."

                     EFFECTIVE DATE OF 1970 AMENDMENT
      Section 101(j) of Pub. L. 91-614 provided that: "The amendments
    made by this section [enacting section 6905 of this title, amending
    this section and sections 1223, 2055, 2204, 6040, 6075, 6091, 6161,
    6314, 6324, and 6504 of this title, and enacting provisions set out
    as notes under this section and sections 2204 and 6905 of this
    title] (other than subsection (f)) [amending sections 2204 and 6905
    of this title] shall apply with respect to decedents dying after
    December 31, 1970."

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