tax aspects of selling mutual fund shares

History of Alternative Valuation Dates

CPAs & Advisors

John W. Haag Sr.
John W. Haag Sr. CPA/ABV, CFF, CVA Managing Principal CPAs & Advisors

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It may seem unfair or inequitable to owe a substantial tax bill on an inheritance that proves to be worthless shortly after it’s received. To correct supposed injustices resulting from extreme fluctuations in market valuation, Congress added the alternative valuation date provision. This intervention was made after the stock market crash of 1929, to provide relief for post-death decreases in the value of estate property.

Congress initially provided for an alternative valuation date one year after the decedent’s death. However, in 1970, Congress amended the alternative valuation date to six months after the decedent’s death, because it changed the deadline for filing estate tax returns from 15 months to nine months.

Recently, a bill, known as the Fair Tax Act of 2019, was introduced in the U.S. House to repeal the estate tax altogether. However, in the midst of the novel coronavirus (COVID-19) crisis, it’s unlikely that proposed legislation has enough support to be enacted any time soon.

Are you seeking a valuation for your business? There’s no one-size-fits-all approach to estimating the short- and long-term financial impacts of the pandemic. Many variables remain unclear in the midst of the crisis. Contact Yeo & Yeo’s valuation professionals to determine what’s appropriate in your situation.

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