26 U.S.C. § 2032 — Alternate valuation
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 489 words · no verdicts yet
This section lets an executor choose an alternate valuation method for property in a gross estate. It sets valuation dates, limits deductions, requires the election to reduce specified amounts, and makes a timely election irrevocable.
(a) General. If the executor elects it, the gross estate may be valued by valuing every included item as follows:
(1) Property distributed, sold, exchanged, or otherwise disposed of within 6 months after the decedent dies is valued on the date of that event.
(2) Property not distributed, sold, exchanged, or otherwise disposed of within those 6 months is valued on the date 6 months after the decedent dies.
(3) An interest or estate whose value changes only because time passes is included at its value when the decedent died, instead of at the later date. Adjust that value for any later-date difference not caused by merely passing time.
(b) Special rules. This chapter allows no deduction for an item if the alternate valuation under this section effectively gives that item’s allowance. Whenever another subsection or section refers to property’s value when the decedent died, treat the reference as the value used to determine the gross estate.
If the executor makes this election:
(1) For the charitable deduction under section 2055 or 2106(a)(2), value each listed bequest, legacy, devise, or transfer as of the decedent’s death, adjusted for any value difference at the end of 6 months that was not caused by merely passing time or by a contingency occurring or not occurring. For property distributed, sold, exchanged, or otherwise disposed of during those 6 months, use the date of that event instead.
(2) For the marital deduction under section 2056, use the same death-date valuation and adjustment rule for an interest in property passing to the surviving spouse.
(c) Election must decrease gross estate and estate tax. An estate may use this election only if it decreases both:
(1) the value of the gross estate; and
(2) the total of the tax under this chapter and the tax under chapter 13 on property includible in the gross estate, after subtracting credits allowed against those taxes.
(d) Election.
(1) In general. The executor must make the election on the return for the tax imposed by this chapter. Once made, the election cannot be revoked.
(2) Exception. The executor may not make the election if the return is filed more than 1 year after the legally prescribed filing deadline, including extensions.
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:
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.
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.
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.
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—
for purposes of the charitable deduction under section 2055 or 2106(a)(2), any bequest, legacy, devise, or transfer enumerated therein, and
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).
No election may be made under this section with respect to an estate unless such election will decrease—
the value of the gross estate, and
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).
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.
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 credit: (Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 91–614, title I, § 101(a), Dec. 31, 1970, 84 Stat. 1836; Pub. L. 98–369, div. A, title X, §§ 1023(a), 1024(a), July 18, 1984, 98 Stat. 1030; Pub. L. 99–514, title XIV, § 1432(c)(1), Oct. 22, 1986, 100 Stat. 2730.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1970Amended · Pub. L. 91-614 · 84 Stat. 1836
- 1984Amended · Pub. L. 98-369 · 98 Stat. 1030
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2730
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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