Valuation of Estate Assets
Assets belonging to the deceased estate owner are included in his or her estate at their fair market value on the date of death or, if the executor elects, their value six months after date of death.
"Six months after date of death" is referred to as the "alternate valuation date." Use of the alternate valuation date election must reduce both the value of the gross estate and the federal estate tax liability. If this election is made, assets sold or distributed during the six-month period are valued at the date of sale or distribution. Under proposed regulations, generally effective for decedents dying on or after April 25, 2008, the alternate valuation date method may be elected only if the property remaining in the estate six months after the decedent's death has declined in value due to "market conditions" and not merely because of a lapse of time or other post-death event.