Alternate Valuation

Alternate Valuation means:
a method whereby property included in a decedent's gross estate is valued as of a date other than the date of death. The following rules apply: 1. Any property distributed, exchanged, or otherwise disposed of within 6 months after the decedent's death is valued as of the date of distribution, sale, exchange, or other disposition.

2. Any property not disposed of within 6 months after the decedent's death is valued as of 6 months after the date of death.

3. Any property, interest, or estate that is affected by mere lapse of time is valued as of the date of the decedent's death. Properties affected by the mere lapse of time include patents, remainders, and reversions. The term alternate valuation does not include obligations for the payment of money, whether or not interest bearing.

The election to use alternate valuation applies to all property of the estate except for special-use valuation. The election must be made on the first tax return filed for the estate and must be filed within 1 year of the due date (including extensions) for filing the return. The election may be made only if it will decrease the value of the gross estate and the sum of the estate tax and the generation-skipping tax.

See Inheritance Tax and Inheritance Tax.