Identify which of the following statements is true.
A)The alternate valuation date can be used for estate tax purposes only if the election increases the value of the gross estate.
B)If the alternative valuation date is elected, changes in value that occur solely because of "mere lapse of time" usually are to be ignored.
C)The gross estate, a federal law concept, is generally smaller than the probate estate, a state law concept.
D)All of the above are false.

Question

Quizplus · Accepted Answer

The statement that is true is B) If the alternative valuation date is elected, changes in value that occur solely because of "mere lapse of time" usually are to be ignored. The alternate valuation date is an optional date that can be chosen for valuing the assets in a decedent's estate for estate tax purposes, and its use can result in a lower estate tax liability if the value of the assets has decreased since the decedent's date of death. However, any changes in value resulting from factors other than the mere lapse of time (such as improvements to property, or changes in market conditions) must still be taken into account when valuing the assets for estate tax purposes. The other statements are all false: A) the alternate valuation date can be used to decrease (not necessarily increase) the value of the gross estate; C) the gross estate is generally larger (not smaller) than the probate estate because it includes all property interests owned by the decedent at the time of death, not just those subject to probate; and D) since statement B is true, this answer choice is incorrect.

Identify Which of the Following Statements Is True