Alternate Valuation Method Law & Legal Definition


Alternate valuation method refers to the valuation of the gross estate of a decedent for estate tax purposes as of a date other than that of his death, usually one year after the date of his death.

Pursuant to federal statute, 26 USCS § 2032, the value of the gross estate may be determined, if the executor so elects, by valuing all the property included in the gross estate as follows:

a. in the case of property distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent's death such property will be valued as of the date of distribution, sale, exchange, or other disposition;

b. in the case of property not distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent's death such property will be valued as of the date 6 months after the decedent's death;

c. any interest or estate which is affected by mere lapse of time will be included at its value as of the time of death (instead of the later date) with adjustment for any difference in its value as of the later date not due to mere lapse of time.