Estate FMV Dates
Dick Adams
portfolio. I know we need the FMV at the sate of death.
Under what conditions can use the date of six months later?
Dick
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Arthur Kamlet
Dick Adams <rda...@panix.com> wrote:
>My M-I-L died in July. We are just learning of her stock
>portfolio. I know we need the FMV at the sate of death.
>Under what conditions can use the date of six months later?
The estate's executor can elect to use the Alternative
Valuation Date of six months later only when doing so reduces
the federal estate tax. That impplies a large enough estate
to generate a Form 706 estate tax to begin with.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
Dick Adams
>> My M-I-L died in July. We are just learning of her stock
>> portfolio. I know we need the FMV at the sate of death.
>> Under what conditions can use the date of six months later?
> The estate's executor can elect to use the Alternative
> Valuation Date of six months later only when doing so reduces
> the federal estate tax. That impplies a large enough estate
> to generate a Form 706 estate tax to begin with.
Unfortunately, the estate will pay no taxes. My question relates
to the basis of the beneficiaries. Fabricated examples follows:
Event Date Example 1 Example 2
-------------- --------- --------- ---------
Death: July 2009 $ 100,000 $ 80,000
Distribution: Jan 2010 80,000 100,000
Sale: Mar 2010 120,000 120,000
It's the difference a $20,000 and $40,000 gain!
Again these are numbers I made up.
Dick
Bill Brown
>
> Unfortunately, the estate will pay no taxes. �My question relates
> to the basis of the beneficiaries. �Fabricated examples follows:
>
> Event � � � � � � �Date � � �Example 1 � Example 2
> -------------- � --------- � --------- � ---------
> Death: � � � � � July 2009 � $ 100,000 � $ �80,000
> Distribution: � �Jan �2010 � � �80,000 � � 100,000
>
> Sale: � � � � � �Mar �2010 � � 120,000 � � 120,000
>
> It's the difference a $20,000 and $40,000 gain!
> Again these are numbers I made up.
My condolences on your loss.
You can only elect the alternative valuation date if it will lower
both the value of the taxable estate and the estate tax. Since the
estate tax is zero either way, the alternative date is not available.
D. Stussy
news:hef2bg$rs$1...@reader1.panix.com...
> In article <hef1l2$1k6$3...@reader1.panix.com>,
> Dick Adams <rda...@panix.com> wrote:
> >My M-I-L died in July. We are just learning of her stock
> >portfolio. I know we need the FMV at the sate of death.
> >Under what conditions can use the date of six months later?
>
> The estate's executor can elect to use the Alternative
> Valuation Date of six months later only when doing so reduces
> the federal estate tax. That impplies a large enough estate
> to generate a Form 706 estate tax to begin with.
I don't see a REQUIREMENT that the election is limited to when the
valuation reduces the estate tax.
(However, I agree that selecting a higher valuation defeats the purpose of
the election.)
========================================= MODERATOR'S COMMENT:
From page 7 of 2008 Intructions to Form 706
=
"You may not elect alternate
valuation unless the election will
decrease both the value of the gross
estate and the sum (reduced by
allowable credits) of the estate and
GST taxes payable by reason of the
decedent�s death for the property
includible in the decedent�s gross
estate."
D. Stussy
news:hef2qc$kfs$1...@snarked.org...
Your citiation is not statute (but is reflective of Section 2032(c)).
Furthermore, reducing the estate tax by itself isn't enough. Reduction of
gross estate is also required. Mr. Kamlet's statement was incomplete.
One can have a reduction in tax without a reduction in gross estate - if
expenses and deductions to arrive at taxable estate differ under the
methods.
Stuart A. Bronstein
>>My M-I-L died in July. We are just learning of her stock
>>portfolio. I know we need the FMV at the sate of death.
>>Under what conditions can use the date of six months later?
>
> The estate's executor can elect to use the Alternative
> Valuation Date of six months later only when doing so reduces
> the federal estate tax. That impplies a large enough estate
> to generate a Form 706 estate tax to begin with.
One other thing - the election must be taken on the estate tax
return, and the return has to be filed no later than one year late
(including extensions).
--
Stu
http://downtoearthlawyer.com
Stuart A. Bronstein
> "Arthur Kamlet" <kam...@panix.com> wrote
>> The estate's executor can elect to use the Alternative
>> Valuation Date of six months later only when doing so reduces
>> the federal estate tax. That impplies a large enough estate
>> to generate a Form 706 estate tax to begin with.
>
> I don't see a REQUIREMENT that the election is limited to when
> the valuation reduces the estate tax.
>
> From page 7 of 2008 Intructions to Form 706
> =
> "You may not elect alternate
> valuation unless the election will
> decrease both the value of the gross
> estate and the sum (reduced by
> allowable credits) of the estate and
> GST taxes payable by reason of the
> decedent�s death for the property
> includible in the decedent�s gross
> estate."
Just in case he doesn't believe you:
IRC �2032(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)."
--
Stu
http://downtoearthlawyer.com