Discussion:Alternate Valuation Date Dividend Accruals
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Basic Tax Questions --> Alternate Valuation Date Dividend Accruals
Discussion Forum Index --> Tax Questions --> Alternate Valuation Date Dividend Accruals
SGuinn1234 (talk|edits) said: | 12 May 2008 |
| Assume decedent's date of death is December 2, 2007 but the alternate valuation date of June 2, 2008 is elected. Decedent owned 100 shares of publically traded ABC corporation on December 2, 2007. ABC declared a $1.00/share dividend on November 26, 2007, which went ex-dividend on November 28, to holders of record on November 30, payable on December 4. Consequently, this $100 dividend would be "included property" listed separately in both the "Value at date of death" and "Alternate valuation date" columns of Schedule B to Form 706. Suppose, however, the ABC also subsequently declares a $1.50/share dividend on May 26, 2008, which goes ex-dividend on May 28, to holders of record on May 30, payable on June 4. Is this $150 May 26 dividend also "included property" that should be separately listed in the "Alternate valuation date" column of Schedule B to Form 706 (pursuant to Treas. Reg. 20.2032-1(d)(4))? | |
| 12 May 2008 | |
| The question here is whether the dividend accrued but unpaid on the alternate valuation date should be included in the gross estate. The answer is usually no. However, extraordinary dividends (e.g. liquidating dividends) or dividends not paid out of earnings and profits would be includible. | |
| 12 May 2008 | |
| Agree with Riley. The November 30 dividend is listed as accrued income on the 706 regardless of alternate value election. (Along with all other date of death income accruals.) A second adjustment with have to be something materially affecting value. Capital gains dividends from mutual funds would be an example. | |
SGuinn1234 (talk|edits) said: | 13 May 2008 |
| Thanks very much, Riley2 and Dennis. I assume there would also be no mean value adjustment for outstanding dividends where the ex-dividend date falls before the alternate valuation date which falls before the holder of record date. I.e., in the above example, if ABC instead declared the $1.50/sh dividend on May 26, ex-dividend on May 28, to holders of record on June 3, payable on June 4..........this would not generate any per share adjustment to the alternate valuation date mean value (average of high/low on June 2). Correct (assuming no extraordinary dividend or something materially affecting value circumstance)? | |
To join in on this discussion, you must first
log in.
