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The regulations promulgated under section 2031 generally
provide the methods by which property described in sections 2033
through 2045 is to be valued. Secs. 20.2031-1 through 20.2031-9,
Estate Tax Regs. The valuation of any property not specifically
described in sections 20.2031-2 through 20.2031-8, Estate Tax
Regs., is made in accordance with the general principles set
forth in section 20.2031-1, Estate Tax Regs. See sec. 20.2031-9,
Estate Tax Regs. Where the property is subject to valuation
using general principles, the value of property includable in the
gross estate is its fair market value. Sec. 20.2031-1(b), Estate
Tax Regs. A property’s fair market value is the price at which
the property would change hands between a willing buyer and a
willing seller, neither being under any compulsion to buy or
sell, and both having reasonable knowledge of relevant facts.
Id.
Section 2033 provides that the value of a decedent’s gross
estate includes the value of all property to the extent of the
decedent’s interest at the time of his death. Sec. 2033; Estate
of Mellinger v. Commissioner, 112 T.C. 26 (1999). Decedent owned
a 50-percent interest in the partnership at the time of her
death, the value of which must be included in her gross estate.
Sec. 2033. On the valuation date, the partnership’s assets
included the right to receive 19 annual lottery payments and
cash. To establish the value of decedent’s interests in the
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Last modified: May 25, 2011