Can a Trust use the Alternate Valuation Date when selling property?

Forum|Forum|4 years ago
January 20, 2022
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The value of my mother's house increased during the six months after her death. Her trust has sold the house, to distribute proceeds to the beneficiary. I am trying to minimize the capital gains tax that the trust will owe. Can I use the 6th months valuation for the higher FM? Also, I sold the house Sept 21. She passed away on Feb 5. Basically, I sold it 7-1/2 months after her death. Is that close enough to warrant the FMV being the selling cost?

TurboTax Business Windows

A

Anonymous_

Employee

@DC13_2 wrote:

Can I use the 6th months valuation for the higher FM?

No. The alternate valuation date can be elected only if it reduces the value of the gross estate and reduces the amount of estate tax per Section 2032.

D

DC13_2Author

Employee

You have clarified this regarding an "estate." An estate tax form is not required for this estate. I am inquiring about trust taxes. The trust sold the house and the trust will owe and pay the capital gains tax. In that case, can the alternate evaluation be used? And, if not, other than your example of "lowering the value of the estate", when can it be used. Thanks in advance for your help.

A

Anonymous_

Employee

@DC13_2 wrote:

The trust sold the house and the trust will owe and pay the capital gains tax. In that case, can the alternate evaluation be used? And, if not, other than your example of "lowering the value of the estate", when can it be used.

No. Unfortunately, the alternate valuation date (election) cannot be used in that situation; it is limited to estates where both the value and estate tax would be reduced.