Title 26 — Internal Revenue Code
Part III · Chapter 11 — Estate Tax
§ 2032. Alternate valuation
Statutory text
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:
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.
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.
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.
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—
for purposes of the charitable deduction under section 2055 or 2106(a)(2), any bequest, legacy, devise, or transfer enumerated therein, and
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).
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—
the value of the gross estate, and
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).
Election
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.
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.
Legislative history
Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.
Aug. 16, 1954, ch. 736, 68A Stat. 381 · 68A Stat. 381
Enacted · 26 U.S.C. § 2032
Aug. 16, 1954, ch. 736, 68A Stat. 381
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 381Excise, Estate, and Gift Tax Adjustment Act of 1970
Pub. L. 91–614 title I § 101(a) · 84 Stat. 1836
Substituted · 26 U.S.C. § 2032
Pub. L. 91–614 substituted “6 months” for “1 year” in four places
Substituted · 26 U.S.C. § 2032
Pub. L. 91–614 substituted “6-month” for “1-year”
Source evidence
Code amendment note
Pub. L. 91–614 substituted “6 months” for “1 year” in four places and substituted “6-month” for “1-year”.Enacted provision · exact public law section
(a) Alternate Valuation.— Section 2032 (relating to alternate valuation) is amended— (1) by striking out “1 year” each place it appears and inserting in lieu thereof “6 months”, and (2) by striking out “1-year” and inserting in lieu thereof “6-month”.Tax Reform Act of 1984
Pub. L. 98–369 § 1023(a) · 98 Stat. 494
Redesignated · 26 U.S.C. § 2032(c)
Pub. L. 98–369, § 1023(a), added subsec. (c). Former subsec. (c) redesignated (d)
Source evidence
Code amendment note
Subsec. (c). Pub. L. 98–369, § 1023(a), added subsec. (c). Former subsec. (c) redesignated (d).Enacted provision · exact public law section
(a) General Rule.— Section 2032 (relating to alternate valuation) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: “(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 amount of the tax imposed by this chapter (reduced by credits allowable against such tax).”Tax Reform Act of 1984
Pub. L. 98–369 § 1024(a) · 98 Stat. 494
Substituted · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), substituted “Election” for “Time of election” in heading
Amended · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), designated existing text as par. (1)
Inserted · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), inserted heading “In general”
Substituted · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), 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 · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), inserted sentence providing that an election, once made, is irrevocable
Added · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1024(a), added par. (2)
Source evidence
Code amendment note
Subsec. (d). Pub. L. 98–369, § 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).Enacted provision · exact public law section
(a) General Rule.— Subsection (d) of section 2032 (relating to time of election), as amended by section 1023, is amended to read as follows: “(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.”Tax Reform Act of 1984
Pub. L. 98–369 § 1023(a) · 98 Stat. 494
Redesignated · 26 U.S.C. § 2032(d)
Pub. L. 98–369, § 1023(a), redesignated subsec. (c) as (d)
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 98–369, § 1023(a), redesignated subsec. (c) as (d).Enacted provision · exact public law section
(a) General Rule.— Section 2032 (relating to alternate valuation) is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection: “(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 amount of the tax imposed by this chapter (reduced by credits allowable against such tax).”Tax Reform Act of 1986
Pub. L. 99–514 title XIV § 1432(c)(1) · 100 Stat. 2085
Amended · 26 U.S.C. § 2032(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).”
Source evidence
Code amendment note
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).”Enacted provision · exact public law section
(1) In general.— Paragraph (2) of section 2032(c) (relating to election must decrease gross estate and estate tax) is amended to read as follows: “(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).”Effective date note
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.
11 of 12 references resolved to an enrolled provision · 1 partial
Editorial Notes
Amendments1970–1986 · 3 rounds
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, § 1023(a), added subsec. (c). Former subsec. (c) redesignated (d).
Subsec. (d). Pub. L. 98–369, § 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, § 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”.
Statutory Notes and Related Subsidiaries
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 , 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
Pub. L. 98–369, div. A, title X, § 1023(b), , 98 Stat. 1030, 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 [].”
Pub. L. 98–369, div. A, title X, § 1024(b), , 98 Stat. 1030, as amended by Pub. L. 99–514, § 2, , 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 [].
“(2) Transitional rule.—
In the case of an estate of a decedent dying before the date of the enactment of this Act [] 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
Pub. L. 91–614, title I, § 101(j), , 84 Stat. 1838, 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 .”
Credits
1954–1986 · 4 acts
- 1954Aug. 16, 1954, ch. 736, 68A Stat. 381
- 1970Pub. L. 91–614, title I, § 101(a), , 84 Stat. 1836
- 1984Pub. L. 98–369, div. A, title X, §§ 1023(a), 1024(a), , 98 Stat. 1030
- 1986Pub. L. 99–514, title XIV, § 1432(c)(1), , 100 Stat. 2730.
Show as published
(Aug. 16, 1954, ch. 736, 68A Stat. 381; Pub. L. 91–614, title I, § 101(a), , 84 Stat. 1836; Pub. L. 98–369, div. A, title X, §§ 1023(a), 1024(a), , 98 Stat. 1030; Pub. L. 99–514, title XIV, § 1432(c)(1), , 100 Stat. 2730.)