IRC 2032 Alternate valuation

It's the combined market values of all properties owned by the decedent. And yes, it means that the alternate valuation date will only be selected if it reduces the size of the gross estate and reduces the estate taxes due.

That's the whole purpose of the alternate valuation date - if there is some calamity occurs that causes a general reduction in the value of most assets, then they can use the later date.

If things are sold at different times, then yes, they can have different valuation dates.

I don't know what they are referring to. An example I can think of (probably a poor one) is a promissory note. If the debtor has been making payments it's worth less because the principal has been paid down over time, and if payments have not been made the value goes down because collection becomes less likely.

The values of life estates go down merely as a result of time. Perhaps Congress was just trying to anticipate someone's attempt to be creative.

If only some properties are sold within 6 months, The if terms of valuation of the estate for estate tax purpose, does one use the values on the dates of sale for those properties sold and the date of death for other properties? OR do the sold properties need to re-valued at date of death to see if the sales value are lower than that on date of death?

There is no flexibility in the process and it's really simple. You value the entire estate as of the date of death. You value the entire estate as of the alternate valuation date. For those assets that have been sold between the date of death and the alternate valuation date, you use their value when they were sold for the alternative valuation. Any new assets acquired by the estate during the six-month period are only valued at the alternate valuation date. You also have to keep track of changes in cash positions.

Once you have those two complete estate valuations, you can choose to use the alternate valuation if, and only if, the alternative valuation is smaller than the date of death valuation AND the alternate valuation results in a lower estate tax.

Once you have established the valuation you are using, that becomes the basis for all assets transferred to beneficiaries.

Ira Smilovitz, EA Leonia, NJ

It is not cleared to me whether your response above addressed this question

I meant the date of disposition of properties owned by the revocable trust at time of death.

TIA

If you think about it, it definitely addressed the question.

It would be pretty stupid if the date of distribution was the same as the date of death. That would mean that the alternate valueation date would never be able to be used because all property was distributed on the date of death.