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Valuation Of Estate Assets
Assets belonging to the deceased estate owner are included in his or her estate at their fair market value on the date of death or if the executor elects, their value six months after date of death.
A Few Selected Assets
| Type of Asset | How Asset is Valued | Reference |
| Listed stocks and bonds (including over the counter) | The mean between highest and lowest quoted selling prices on the valuation date | Reg. Sec. 20.2031-2(b)(1) |
| Mutual funds | Valued at their "bid" price or redemption value (i.e., the amount the fund would pay the shareholder if it redeemed the shares on the valuation date). | Regs. Sec. 20.2031-8(b) and 25.2512-6(b); U.S. vs. Cartwright, 411 U.S. 546 (1973) |
| Survivor's annuity (under a joint and survivor annuity contract) | The amount which the same insurance company would require for a single life annuity on the survivor, as of the applicable valuation date. | Reg. Sec. 20.2031-8 |
| Close Corporation Stock | Fair market value is based on history and nature of business, economic outlook, book value, earning capacity, dividend paying capacity, goodwill, recent sales of stocks and similar publicly traded company stock. | Rev. Rul. 59-60, 1959-1 C.B. 237 |
| Real Estate | Fair market value of real estate in the United States or in a foreign country. | IRC Secs. 2031, 2032A, 2033 |
| Real Estate (farm or corporate owned) | Value may be determined by "actual use" rather than on it's "highest and best use" if certain conditions are met. | IRC Sec. 2032A |
| Flower bonds | Par value to the extent of any federal estate tax due. Market value on excess over the federal estate tax due | Reg. Sec. 20.6151-1(c) |
| Mortgages and notes | The amount of the unpaid principal plus accrued interest, unless a lower value can be proven (i.e. an insolvent debtor) | Reg. Sec. 20.2031-4 |
| Life insurance on the decedents life | Amount receivable by the estate or by a named beneficiary, if the deceased insured had "incidents of ownership" in the policy. | Reg. Sec. 20-2042-1 |
The "six month after death" is referred to as the "alternate valuation date." (IRC Sec. 2032) If elected, assets sold or distributed during this six month period are valued at the date of the sale or distribution. All other assets must be valued at the six month date except assets that diminish in value due to the mere lapse of time (e.g., an annuity). If elected, it must reduce both the value of the decedent's gross estate and the federal estate tax liability. IRC Sec. 2032(c)
| Type Of Asset | How Asset Is Valued | Reference |
| Life insurance owned by the decedent on the life of another person. | The cost of buying another policy of the same value and same type of the same insured. | Reg. Sec. 20.2031-8 |
| Joint tenancy with a spouse | One-half of the value of property owned jointly by spouses is included in the estate of the first spouse to die | IRC Sec. 2040(b) |
| Joint tenancy with other than spouse (general rule) | Entire value of property less the original contribution of the survivor is included in the estate of the first joint tenant to die. | IRC Sec. 2040(a) |