Internal Revenue Code:Sec. 2032. Alternate valuation

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Location in Internal Revenue Code

     TITLE 26 - INTERNAL REVENUE CODE
      Subtitle B - Estate and Gift Taxes
       CHAPTER 11 - ESTATE TAX
        Subchapter A - Estates of Citizens or Residents
         PART III - GROSS ESTATE
       

Statute

    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:
        (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) 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 -
        (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,
    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 -
        (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) Election
      (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.
      (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.
 

Sources

    (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, Sec. 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.)
 

Miscellaneous

                                 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.''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 996, 1014, 1016, 2055,
    2056A, 2106, 2624 of this title.