§2032 — Title 26 Internal Revenue Code | U.S. Code

Summary

An executor can choose an alternate way to value the property in an estate for tax purposes. If chosen, property sold, given away, or otherwise disposed of within 6 months after death is valued on the date it was disposed. Property not disposed of within 6 months is valued on the date six months after death. Any interest that only changes because time passed is valued at the time of death, but you must adjust for value changes that happened for other reasons. Using the alternate values changes how deductions and the values used elsewhere on the return are figured, including amounts for charitable gifts and for property passing to a surviving spouse. The executor must make the choice on the estate tax return, the choice is final, and it can only be used if it lowers the gross estate and lowers the total tax under this chapter plus the tax under chapter 13 (after credits). No election is allowed if the return is filed more than 1 year late.

Title 26, §2032

Internal Revenue Code — Source: USLM XML via OLRC

(a)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:

(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.

(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.

(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)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—

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

(2)for the purpose of the marital deduction under section 2056, any interest in property passing to the surviving spouse,

(c)No election may be made under this section with respect to an estate unless such election will decrease—

(1)the value of the gross estate, and

(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)(1)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.

(2)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.

Notes & Related Subsidiaries

Editorial Notes

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, § 1023(a), added subsec. (c). Former subsec. (c) redesignated (d). Subsec. (d). Pub. L. 98–369, § 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, § 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”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1986 AmendmentAmendment 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

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note under section 2601 of this title.

Effective Date

of 1984 Amendment Pub. L. 98–369, div. A, title X, § 1023(b), July 18, 1984, 98 Stat. 1030, 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].” Pub. L. 98–369, div. A, title X, § 1024(b),

July 18, 1984, 98 Stat. 1030, as amended by Pub. L. 99–514, § 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 Pub. L. 91–614, title I, § 101(j), Dec. 31, 1970, 84 Stat. 1838, provided that: “The

Amendments

made by this section [enacting section 6905 of this title, amending this section and section 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 section 2204 and 6905 of this title] (other than subsection (f)) [amending section 2204 and 6905 of this title] shall apply with respect to decedents dying after December 31, 1970.”

§2032 Alternate valuation

Summary

Title 26, §2032

Notes & Related Subsidiaries

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Statutory Notes and Related Subsidiaries

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