The IRS is considering limiting use of Alternate Valuation Date by Estates!
What is the Alternative Valuation Date used by Estates?
Under current tax law, the executors would have to pay estate tax on value of assets that are based on either one of the following rules as follows:
1. the date the owner of the estate deceased or
2. 6 months following date the owner deceased.
Clearly, the intent is choose a date that has the least valuation for the assets. In so doing, the executor ensures that the estate ends up paying the least amount of estate taxes.
The IRS is now considering the restriction of the use of the later date in cases where is it determined that the cause of the asset decline is due to the stock market conditions.