Extension of time for an estate to make a late alternate valuation election under section 2032

Plain-English summary

The estate tax is normally based on the value of a decedent's property at the date of death, but section 2032 lets the executor elect "alternate valuation," valuing the property six months later, which can lower the tax when asset values have fallen. The election must be made on the estate tax return (Form 706) and cannot be made if the return is filed more than one year after its due date. Here the executor timely filed the Form 706 without making the election because the accounting firm had not advised it was available. After learning the estate should have elected alternate valuation, the executor filed a supplemental Form 706 (within one year of the original due date) making the election, which reduced the gross estate and the estate tax due. The estate asked the IRS for relief under Treas. Reg. § 301.9100-3 to treat the election as timely. The IRS found the executor acted reasonably and in good faith (relying on a tax professional) and that relief would not prejudice the government, so it granted an extension to the date the supplemental return was filed. The IRS expressed no opinion on whether the estate actually qualifies to use the alternate valuation date.

Ruling snapshot

• Question: Should the estate get an extension of time to make a late alternate valuation election under section 2032?
• Outcome: Approved (extension to the date the supplemental Form 706 was filed)
• Key authorities: IRC § 2032; Treas. Reg. §§ 20.2032-1, 301.9100-1, 301.9100-3

Full text (IRS public release)

Internal Revenue Service
Department of the Treasury
Washington, DC 20224

Number: 202547003
Third Party Communication: None
Release Date: 11/21/2025
Date of Communication: Not Applicable
Index Number: 2032.00-00, 9100.00-00
Person To Contact:
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Telephone Number:
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Refer Reply To:
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CC:PT&E:B04
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PLR-104247-25
Date:
August 25, 2025

In Re: ---------------------------------

LEGEND

Decedent = ------------------------------ -----------------
Executor = -----------------------------
Accounting Firm = --------------------------
Date 1 = ------------------
Date 2 = ---------------------
Date 3 = ------------------------

Dear -----------------:

This letter responds to your authorized representative's letter dated January 29, 2025, and subsequent correspondence, 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. Executor retained Accounting Firm to prepare the United States Estate (and Generation-Skipping Transfer) Tax Return (Form 706) for Decedent's estate (Estate). On Date 2, Executor timely filed the Form 706. As of Date 2, the Executor was not aware of the need to make, and Accounting Firm had not advised the Executor to make, the election for alternate valuation under § 2032. Subsequently, Executor was advised that the Estate should have elected alternate valuation under § 2032 for the property included in the gross estate. Executor retained Accounting Firm to prepare a supplemental Form 706 for the Estate. On Date 3, which
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was within one year after the due date of the Form 706 (including extensions), Executor filed the supplemental Form 706, electing alternate valuation under § 2032. As reflected on the supplemental Form 706, the alternate valuation election results in a decrease in the value of the gross estate and the amount of federal estate tax due.

Decedent's Estate requests an extension of time to Date 3, the date the supplemental Form 706 was filed, to make an alternate valuation election under § 2032.

LAW AND ANALYSIS

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 the election will decrease: (1) the value of the gross estate; and (2) the sum of the federal estate tax and the generation-skipping transfer tax imposed on the estate 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 the return is filed more than 1 year after the time prescribed by law (including extensions) for filing the return.

Section 20.2032-1(b)(3) of the Estate Tax Regulations provides that a request for an extension of time to make the election or protective election pursuant to §§ 301.9100-1 and 301.9100-3 will not be granted unless the estate tax return is filed no later than 1 year after the due date of the return (including extensions actually granted).

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 Internal Revenue Code except subtitles E, G, H, and I, if the taxpayer demonstrates to the
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satisfaction of the Commissioner that the taxpayer has acted reasonably and in good faith, and granting relief will not prejudice the interests of the government.

Sections 301.9100-1 through 301.9100-3 provide the standards the Commissioner will use to determine whether to grant an extension of time to make an election.

Section 301.9100-2 provides an automatic extension of time for making certain elections. Section 301.9100-3 provides extensions of time for making elections that do not meet the requirements of § 301.9100-2.

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)(iii) provides that a taxpayer is deemed to have acted reasonably and in good faith if the taxpayer failed to make the election because, after exercising reasonable diligence (taking into account the taxpayer's experience and the complexity of the return or issue), the taxpayer was unaware of the necessity for the election.

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. Therefore, the Executor is 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 along with a copy of the filed supplemental Form 706 should be forwarded to the Internal Revenue Service Center, at the following address: Department of the Treasury, Internal Revenue Service Center, ATTN: E&G, Stop 824G, 7940 Kentucky Drive, Florence, KY 41042-2915.

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. Specifically, we express no opinion concerning whether Decedent's estate is entitled to value Decedent's assets on the alternate valuation date (such conclusion depending, in part, on those factors listed in § 2032(c)). Similarly, we express no opinion concerning the value of Decedent's assets on the alternate valuation date (such conclusion depending upon those factors listed in § 2032(a)).
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The ruling contained in this letter is 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) provides that it may not be used or cited as precedent. In accordance with the Power of Attorney on file with this office, a copy of this letter is being sent to your authorized representative.

Sincerely,

Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Melissa C. Liquerman
By: _______
Melissa C. Liquerman
Senior Counsel, Branch 4
Office of the Associate Chief Counsel
(Passthroughs, Trusts, and Estates)

Enclosure:
Copy for § 6110 purposes

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