Extension Granted to Make Alternate Valuation Election
LTR 201719014
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2017-53809
- Tax Analysts Electronic Citation2017 TNT 92-30
Third Party Communication: None
Date of Communication: Not Applicable
Person To Contact: * * *
Telephone Number: * * *
Index Number: 9100.00-00, 2032.00-00
Release Date: 5/12/2017
Date: January 23, 2017
Refer Reply To: CC:PSI:B04 - PLR-127985-16
LEGEND:
Decedent = * * *
Date 1 = * * *
Child 1 = * * *
Child 2 = * * *
Attorney = * * *
Date 2 = * * *
Accounting Firm = * * *
Date 3 = * * *
Dear * * *:
This responds to your authorized representative’s letter dated September 1, 2016, requesting an extension of time under §§ 301.9100-1 and 301.9100-3 of the Procedure and Administration Regulations to make an alternate valuation election under § 2032 of the Internal Revenue Code (Code).
The facts and representations submitted are summarized as follows. Decedent died on Date 1. The co-personal representatives of Decedent’s estate are Child 1 and Child 2. The co-personal representatives retained Attorney to prepare Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return. The co-personal representatives timely filed Form 706 on Date 2. Attorney did not advise the co-personal representatives to make the election for alternate valuation under § 2032 on the Form 706. Accordingly, the election for alternate valuation under § 2032 was not made. Co-personal representatives retained Accounting Firm to advise and prepare Decedent’s final income tax return. Accounting Firm advised the co-personal representatives of the election for alternate valuation under § 2032. On or about Date 3, which was within one year after the due date of the Form 706 (including extensions), the co-personal representatives filed a supplemental Form 706 making the election under § 2032.
Section 2032(a) provides, in part, that the value of the gross estate may be determined, if the executor so elects, by valuing all the property included in the gross estate as follows:
(1) In the case of property distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent’s death such property shall be valued as of the date of distribution, sale, exchange, or other disposition.
(2) In the case of property not distributed, sold, exchanged, or otherwise disposed of, within 6 months after the decedent’s death such property shall be valued as of the date 6 months after the decedent’s death.
Section 2032(c) provides that no election may be made under § 2032 with respect to an estate unless such election will decrease: (1) the value of the gross estate; and (2) the sum of the tax imposed under chapter 11 of the Code (estate tax) and the tax imposed by chapter 13 (generation-skipping transfer tax) with respect to property includible in the decedent’s gross estate (reduced by credits allowable against such taxes).
Section 2032(d)(1) provides that an election under § 2032 shall be made by the executor on the return of tax imposed by § 2001. Such election, once made, shall be irrevocable. Under § 2032(d)(2), no election may be made under § 2032 if such return is filed more than one year after the time prescribed by law (including extensions) for filing such return.
Section 20.2032-1(b)(3) of the Estate Tax Regulations provides that a request for an extension of time pursuant to §§ 301.9100-1 and 301.9100-3 will not be granted unless the estate tax return is filed no later than one year after the due date of the return, including extensions.
Under § 301.9100-1(c), the Commissioner may grant a reasonable extension of time to make a regulatory election, or statutory election (but no more than 6 months except in the case of a taxpayer who is abroad), under all subtitles of the Code except subtitles E, G, H, and I.
Requests for relief under § 301.9100-3 will be granted when the taxpayer provides the evidence to establish to the satisfaction of the Commissioner that the taxpayer acted reasonably and in good faith, and that granting relief will not prejudice the interests of the government.
Section 301.9100-3(b)(1)(v) provides that a taxpayer is deemed to have acted reasonably and in good faith if the taxpayer reasonably relied on a qualified tax professional, including a tax professional employed by the taxpayer, and the tax professional failed to make, or advise the taxpayer to make, the election.
Based on the facts submitted and the representations made, we conclude that the standards of §§ 301.9100-1 and 301.9100-3 have been satisfied. Consequently, the co-personal representatives are granted an extension of time to Date 3, the date the supplemental Form 706 was filed, to make the alternate valuation election under § 2032. A copy of this letter should be forwarded to the Cincinnati Service Center at the following address: Internal Revenue Service, Cincinnati Service Center — Stop 82, Cincinnati, OH 45999.
In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.
Except as expressly provided herein, no opinion is expressed or implied concerning the tax consequences of any aspect of any transaction or item discussed or referenced in this letter.
The rulings contained in this letter are based upon information and representations submitted by the taxpayer and accompanied by a penalty of perjury statement executed by an appropriate party. While this office has not verified any of the material submitted in support of the request for rulings, it is subject to verification on examination.
This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of provides that it may not be used or cited as precedent.
Sincerely,
Associate Chief Counsel
(Passthroughs & Special Industries)
By: Karlene M. Lesho
Senior Technician Reviewer, Branch 4
(Passthroughs & Special Industries)
Enclosure:
Copy of letter for section 6110 purposes
cc:
* * *
- Institutional AuthorsInternal Revenue Service
- Code Sections
- Subject Area/Tax Topics
- Jurisdictions
- Tax Analysts Document Number2017-53809
- Tax Analysts Electronic Citation2017 TNT 92-30