Can an inheritor of foreign stocks act as executor for purposes of the 6 mo. alternative valuation date?

Forum|Forum|2 years ago
February 13, 2024
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The term “executor” includes the executor, personal representative, or administrator of the decedent's estate. If none of these is appointed, qualified, and acting in the United States, every person in actual or constructive possession of any property of the decedent is considered an executor and must file a return." ( from Instructions for Form 706 (09/2023)

Based on this definition, an inheritor of foreign assets who is a resident citizen in the US can be an executor. Thus, this executor could select the alternative 6 month valuation date, correct? Further, if the estate is valued < $12.06 million, filing, as in submitting form 706 would not be required, correct?

Best answer by UB401

@UB401 wrote:

I believe a descendent, and or beneficiary can be executor. " A personal representative of an estate is an executor, administrator, or anyone who is in charge of the decedent's property."

That is true, of course, but what exactly is your point?

Again, an executor (regardless of how that person qualifies as such) cannot make the alternate valuation date election unless the election would decrease the value of the gross estate and decrease the amount of estate tax due.

You already stated that filing a 706 would not be necessary so the election is unavailable.

So, is your conclusion that unless you're filing a Form 706 for an estate that is at or above the federal threshold of $12.06 million (year estate created 2022), there is no option for an alternative valuation date? If yes, then that would mean the cost basis for stocks inherited is tied to the date of death and not any other time since then, including date of distribution, date of possession, date of sale, etc., correct?

Anonymous_

Employee

See Section 2032(c): https://www.law.cornell.edu/uscode/text/26/2032

An alternate valuation date cannot be used unless it (a) reduces the value of the gross estate, and (b) decreases the amount of estate tax due.

UB401Author

The foreign estate consists of multiple assets including stocks, real estate, and cash the sum total of which is below the US federal tax threshold of $12.06 million.

Can the inheritor, who is a resident US citizen, and a recipient of part of the estate, specifically stocks, act as executor as per the definition of “executor” in Form 706, and summarily change the valuation date for the entire estate? What is the objective of the US tax code here, to treat the foreign estate as if it were in the US even though there will be no consequence to the foreign estate?

It seems this scenario isn’t covered by section 2032(c).

Anonymous_

Employee

@UB401 wrote:
It seems this scenario isn’t covered by section 2032(c).

The scenario is covered by Section 2032 to the extent that it is the executor who makes the election, not the beneficiary.

The election is made at the estate level and not the distribution level and the criteria for making the election (as set forth above) are delineated in the Code.