
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC2032]

 
                     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
 
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.

(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, Secs. 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.)


                               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.''

                  Section Referred to in Other Sections

    This section is referred to in sections 996, 1014, 1016, 2055, 
2056A, 2106, 2624 of this title.
