- 11 -
Thus, Rev. Proc. 92-85, supra, does not apply to the 1-year
period of grace provided by section 2032(d)(2), during which time
the alternate valuation election may be made.
Accordingly, we find that the executor's failure to make the
alternate valuation election on a Federal estate tax return filed
on or before the date that is 1 year after the time prescribed by
law (including extensions) for filing the return precludes the
election.
Issue 2. Whether the Estate Is Liable for the Addition to Tax
for the Failure To File Its Return Timely
Section 6651(a)(1) imposes an addition to tax for the
failure to file a required return timely unless the failure is
due to reasonable cause and not due to willful neglect.
"Reasonable cause as applied in section 6651 has been defined as
the 'exercise of ordinary business care and prudence.'" Estate
of Duttenhofer v. Commissioner, 49 T.C. 200, 204 (1967) (quoting
Southeastern Fin. Co. v. Commissioner, 153 F.2d 205 (5th Cir.
1946), affg. 4 T.C. 1069 (1945)), affd. 410 F.2d 302 (6th Cir.
1969); see also sec. 301.6651-1(c)(1), Proced. & Admin. Regs.
("If the taxpayer exercised ordinary business care and prudence
and was nevertheless unable to file the return within the
prescribed time, then the delay is due to a reasonable cause.").
Whether the failure to file on time was due to reasonable
cause is primarily a question of fact to be decided from all the
circumstances in a particular case. See Estate of Duttenhofer v.
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