Rev. Rul. 83-31

1983-1 C.B. 225, 1983-8 I.R.B. 7.

                       Internal Revenue Service
                                 Revenue Ruling

                       VALUATION;  FARM AND OTHER ASSETS

                            Published: Feb. 22, 1983

SECTION 2032. - -ALTERNATE VALUATION, 26 CFR 20.2032-1: Alternate valuation

(Also Sections 1016, 2032A; 1.1016-1, 20.2032A-8.)

  Valuation;  farm and other assets.  A decedent's estate may elect both alternative valuation under section 2032 of the Code and special use valuation under section 2032A.

ISSUE

  May a decedent's estate elect alternate valuation under section 2032 of the Internal Revenue Code and special use valuation under section 2032A?

FACTS

  D died in 1981.  D's gross estate included a farm and other assets.

LAW AND ANALYSIS

  Section 2032 of the Code provides, in part, that the executor of a decedent's estate may elect to value all of the property in the gross estate, as of the date 6 months after the decedent's death, except that property that is disposed of within 6 months after death is valued as of the date of disposition.

  Section 2032A of the Code provides that if certain conditions are satisfied, an executor may elect to value real property used for farming purposes on the basis of its use as a farm rather than its fair market value.

  Neither section 2032 nor 2032A of the Code prohibits an executor from making elections under both of these sections.  Section 1016(c) provides for an elective increase in the basis for income tax purposes of property that has been specially valued under section 2032A, if it is subject to the recapture tax provided in section 2032A(c).  Section 1016(c) specifically provides that the income tax basis of the qualified real property is increased to the fair market value of the property as of the alternate valuation date under section 2032, if the estate made an election under that provision.  This is a clear indication of the intent of Congress to permit elections under both sections 2032 and 2032A.

HOLDING

  A decedent's estate may elect alternate valuation under section 2032 of the Code and special use valuation under section 2032A.

Rev. Rul. 83-31, 1983-1 C.B. 225, 1983-8 I.R.B. 7.