Market value dating
If an asset is sold during the six months after the date of death, then the sales price of the asset must be used.The chief downside to using the alternate valuation date values, is that the step-up in basis which beneficiaries receive is locked in at the lower values, which can affect their capital gains liability, should they later decide to sell their inheritances.
If the executor overstates the value, the IRS may impose penalties ranging from 20 percent to 40 percent of the underpayment of tax related to the overstatement of FMV.The expert must be knowledgeable and competent, and must support an opinion with facts and experience. Code, an executor may use the FMV six months after the death of the benefactor for property that has not yet been distributed.Artworks valued at ,000 or more might require both an appraisal and a Statement of Value from the IRS. If the deceased's estate makes non-cash charitable contributions of 0 or more, the executor must complete IRS Form 8283.Different asset categories include cash, marketable securities, real estate, collectibles, businesses, annuities and personal property.
Different standards for determining FMV apply to different asset classes.Under the Internal Revenue Code, the personal representative is permitted to choose whether to use the date of death values or the alternate valuation date values, if the estate is substantial enough to be subject to federal estate taxes, and if using the alternate date reduces the value of the gross estate.