Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 56-60

1956-1 C.B. 443

IRS Headnote

Where the value of the decedent's gross estate at the date of death does not exceed the statutory exemption of $600,000, a Federal estate tax return, Form 706, filed with respect to the estate is not a return as contemplated by section 6018(a)(1) of the Internal Revenue Code of 1954. Consequently, an election to apply the alternate valuation provisions contained in section 2032 of the 1954 Code is not authorized.

Full Text

Rev. Rul. 56-60

The Internal Revenue Service has received numerous inquiries whether the rule expressed in Revenue Ruling 55-333, C.B. 1955-1, 449, may be applied where the value of the decedent's gross estate at the date of death is less than the statutory exemption of $60,000.

In Revenue Ruling 55-333, supra , it was held that section 811(j) of the Internal Revenue Code of 1939 (section 2032 of the Internal Revenue Code of 1954) does not limit the application thereof to the estates of decedents which have decreased in value during the one-year period following the date of death. Consequently, where an estate has increased in value during that period of time and the executor has elected, on a timely filed return, to have the estate valued in accordance with the provisions of section 811(j), all property included in the gross estate which has not been distributed, sold, exchanged, or otherwise disposed of within one year after the decedent's death, shall be valued as of the date one year after the decedent's death. Property distributed, sold, exchanged, or otherwise disposed of within one year after the decedent's death shall be valued as of the date of such distribution, sale, exchange, or other disposition.

Section 6018(a)(1) of the Internal Revenue Code of 1954 specifies that the executor shall, in the case of a citizen or resident, file an estate tax return where the gross estate of a decedent at the date of death exceeds $60,000. Section 2032 of the 1954 Code provides that the election to value the gross estate of the decedent as of one year after the date of death or as of an intermediate date must be made by the executor on the estate tax return. Accordingly, it is held that where the value of the decedent's gross estate at the date of death does not exceed the statutory exemption of $60,000, a Federal estate tax return, Form 706, filed with respect to the estate is not a return as contemplated by section 6918(a)(1) of the Code. Because the return will not be recognized for Federal estate tax purposes, it follows that any material contained therein would have no force or effect with respect to its application in the determination of any other Federal tax liability. Consequently, an election to apply the alternative valuation provisions contained in section 2032 of the 1954 Code is not authorized.