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The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.
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.
Elect alternate valuation by checking “Yes” on line 1 and
filing Form 706. You may make a protective alternate
valuation election by checking “Yes” on line 1, writing the
word “protective,” and filing Form 706 using regular values.
Once made, the election may not be revoked. The election
may be made on a late-filed Form 706, provided it is not filed
later than 1 year after the due date (including extensions
actually granted). Relief under Regulations sections
301.9100-1 and 301.9100-3 may be available to make an
alternate valuation election or a protective alternate valuation
election, provided a Form 706 is filed no later than 1 year
after the due date of the return (including extensions actually
granted).
If alternate valuation is elected, value the property
included in the gross estate as of the following dates, as
applicable.
•
Any property distributed, sold, exchanged, or otherwise
disposed of or separated or passed from the gross estate
by any method within 6 months after the decedent's
death is valued on the date of distribution, sale,
exchange, or other disposition. Value this property on the
date it ceases to be a part of the gross estate; for
example, on the date the title passes as the result of its
sale, exchange, or other disposition.
•
Any property not distributed, sold, exchanged, or
otherwise disposed of within the 6-month period is
valued as of 6 months after the date of the decedent's
death.
•
Any property, interest, or estate that is affected by mere
lapse of time is valued as of the date of the decedent's
death or on the date of its distribution, sale, exchange, or
other disposition, whichever occurs first. However, you
may change the date of death value to account for any
change in value that is not due to a “mere lapse of time”
on the date of its distribution, sale, exchange, or other
disposition.
The property included in the alternate valuation and
valued as of 6 months after the date of the decedent's death,
or as of some intermediate date (as described above), is the
property included in the gross estate on the date of the
decedent's death. Therefore, you must first determine what
property was part of the gross estate at the decedent's death.
Interest. Interest accrued to the date of the decedent's
death on bonds, notes, and other interest-bearing obligations
is property of the gross estate on the date of death and is
included in the alternate valuation.
Rent. Rent accrued to the date of the decedent's death on
leased real or personal property is property of the gross
estate on the date of death and is included in the alternate
valuation.
Dividends. Outstanding dividends that were declared to
stockholders of record on or before the date of the
decedent's death are considered property of the gross estate
on the date of death and are included in the alternate
valuation. Ordinary dividends declared to stockholders of
record after the date of the decedent's death are not included
in the gross estate on the date of death and are not eligible
for alternate valuation. However, if dividends are declared to
stockholders of record after the date of the decedent's death
so that the shares of stock at the later valuation date do not
reasonably represent the same property at the date of the
decedent's death, include those dividends (except dividends
paid from earnings of the corporation after the date of the
decedent's death) in the alternate valuation.
On Schedules A through I, you must show the following.
1. What property is included in the gross estate on the date
of the decedent's death.
2. What property was distributed, sold, exchanged, or
otherwise disposed of within the 6-month period after the
decedent's death, and the dates of these distributions,
etc. (These two items should be entered in the
“Description” column of each schedule. Briefly explain
the status or disposition governing the alternate
valuation date, such as “Not disposed of within 6 months
following death,” “Distributed,” “Sold,” “Bond paid on
maturity,” etc. In this same column, describe each item of
principal and includible income.)
3. The date of death value, entered in the appropriate value
column with items of principal and includible income
shown separately.
4. The alternate value, entered in the appropriate value
column with items of principal and includible income
shown separately. (In the case of any interest or estate,
the value of which is affected by lapse of time, such as
patents, leaseholds, estates for the life of another, or
remainder interests, the value shown under the heading
“Alternate value” must be the adjusted value, for
example, the value as of the date of death with an
adjustment reflecting any difference in its value as of the
later date not due to lapse of time.)
Note. If any property on Schedules A through I is being
valued pursuant to the special rule of Regulations section
20.2010-2(a)(7)(ii), values for those assets are not required
to be reported on the schedule. See Part 5—Recapitulation,
item 10, later.
Distributions, sales, exchanges, and other dispositions of
the property within the 6-month period after the decedent's
death must be supported by evidence. If the court issued an
order of distribution during that period, you must submit a
certified copy of the order as part of the evidence. The IRS
may require you to submit additional evidence, if necessary.
If the alternate valuation method is used, the values of life
estates, remainders, and similar interests are figured using
the age of the recipient on the date of the decedent's death
and the value of the property on the alternate valuation date.
Line 2. Special-Use Valuation of Section 2032A
In general. Under section 2032A, you may elect to value
certain farm and closely held business real property at its
farm or business use value rather than its FMV. Both
special-use valuation and alternate valuation may be elected.
To elect special-use valuation, check “Yes” on line 2 and
complete and attach Schedule A-1 and its required additional
statements. You must file Schedule A-1 and its required
attachments with Form 706 for this election to be valid. You
may make the election on a late-filed return so long as it’s the
first return filed.
The total value of the property valued under section 2032A
may not be decreased from FMV by more than $1,310,000
for decedents dying in 2023.
Instructions for Form 706 (Rev. 09-2023)
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