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under section 2036 is only a corresponding proportion
of the amount described in the preceding sentence.* * *
[Sec. 20.2036-1(a), Estate Tax Regs.]
Thus, since decedent retained possession and enjoyment of her
entire residence, the full value of the condominium is includable
in her gross estate.
The standard for ascertaining such value is then set forth
in section 20.2031-1(b), Estate Tax Regs. Specifically, property
is included in the gross estate at its “fair market value”,
defined as “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 to sell and both having reasonable
knowledge of relevant facts.” Id. The date with respect to
which the asset is valued is either the date of death or, if the
alternate valuation method under section 2032 is elected, the
date prescribed in that section. Sec. 20.2031-1(b), Estate Tax
Regs. As pertinent here, section 2032(a)(1) states that property
disposed of within 6 months of the decedent’s death is valued as
of the date of its disposition.
Decedent’s condominium was sold approximately 5-1/2 months
after her death for $155,000. Respondent determined a value of
$125,000 in the notice of deficiency. The estate has offered no
further evidence and no argument on the issue of valuation. We
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Last modified: May 25, 2011