Dec 1, 2008 12:00 PM

By Robert N. Gordon & Kirk Hoopingarner

It was in the depths of the Great Depression that the alternative valuation mechanism was first put into place. Federal lawmakers realized that forcing an estate to pay taxes on its assets' value the exact day a wealth owner died might mean, when stock values were dropping, that the estate paid too much. After all, the stock wouldn't be sold on that date of death (DOD), but some time later. In 1935, the lawmakers said they had to do something in response to “the hardships that were experienced after 1929 when market values decreased very materially between the period from the date of death and the date of distributions to the beneficiaries.”¹

Today, Internal Revenue Code Section 2032 allows fiduciaries to choose between the value of assets on the date of the wealth owner's death or six months after death. And with the markets volatile once again — soaring and dropping by as much as 800 points in a day — fiduciaries should consider keeping open the option of the alternate valuation date (AVD).

Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

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Topics of Interest

Estate Tax	Donor Advised Funds
GSTs	Family Offices
Private Foundations	Life Insurance
2010 Tax Act News	Industry Trends Surveys

E-Newsletter Signup

2011 Trust Glossary

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50 Years Ago This Month

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50 years ago, in May 1962, we featured articles such as: "Future of Canadian Trusteeship" by Arthur H. Mingay", "Training Trust Employees" by Ian M. Marr, "What is a Trust Officer?" by Eric J. Brown, and "Selling Services" by Donald I. Webb.

Conrad Teitell's Guide to Tax Benefits For Charitable Gifts

Click here to view the most up to date guide (September 2011)

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