The election by an estate of § 2032A (special use valuation as to real estate)or § 2032 (the alternate valuation date)will have an effect on the income tax basis of the property received by the heirs.

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When an estate elects for special use valuation under § 2032A or alternate valuation date under § 2032, it can affect the income tax basis of the property received by the heirs. This is because the valuation used for estate tax purposes may differ from the fair market value at the time of the decedent's death, which is generally used to determine the basis of inherited property for income tax purposes. As a result, the basis could be lower or higher, depending on the chosen election, which would impact the amount of gain or loss recognized on the subsequent sale of the property by the heirs.

The Election by an Estate of § 2032A (Special Use