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Type of Assets
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How Asset Is Valued
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Reference
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Listed Stocks and
Bonds (including over the counter)
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The mean between highest and lowest quoted selling prices on the
valuation date.
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Reg. Sec. 20.2031-2(b)(1)
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Mutual Funds
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Valued at their "bid" price or redemption value (i.e.,
the amount the fund would pay the shareholder if it redeemed the
shares on the valuation date).
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Regs. Secs. 20.2031-8 (b) and 25. 2512-6(b);
U.S. vs. Cartwright,
411 U.S. 546 (1973)
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Survivor’s
Annuity (under a joint and survivor annuity contract)
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The amount which the same insurance company would require for a
single life annuity on the survivor, as of the applicable valuation
date.
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Reg. Sec. 20.2031-8
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Close Corporation
Stock
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Fair market value is based on history and nature of business,
economic outlook, book value, earning capacity, dividend paying
capacity, goodwill, recent sales of stock and similar publicly
traded company stock.
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Rev. Rul. 59-60, 1959-1 C.B. 237
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Real Estate
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Fair market value of real estate in the United States or in a
foreign country.
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IRC Secs. 2031, 2032A, 2033
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Real Estate (farm or
corporate owned)
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Value may be determined by "actual use" rather than on
its "highest and best use" if certain conditions are met.
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IRC Sec. 2032A
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Flower Bonds
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Par value to the extent of any federal estate tax due. Market
value on excess over the federal estate tax due.
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Reg. Sec. 20.6151-1(c)
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Mortgages and Notes
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The amount of the unpaid principal plus accrued interest, unless
a lower value can be proven (i.e., an insolvent debtor).
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Reg. Sec. 20.2031-4
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Life Insurance on the
Decedent’s Life
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Amount receivable by the estate or by a named beneficiary, if the
deceased insured had "incidents of ownership" in the
policy.
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Reg. Sec. 20.2042-1
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Life Insurance Policy
Owned by Decedent on the Life of Another Person
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The cost of buying another policy of the same value and same type
on the same insured.
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Reg. Sec. 20.2031-8
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Joint Tenancy with a
Spouse
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One-half of the value of property owned jointly by spouses is
included in the estate of the first spouse to die.
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IRC Sec. 2040(b)
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Joint Tenancy with
Other than Spouse (general rule)
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Entire value of property less the original contribution of the
survivor is included in the estate of the first joint tenant to die.
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IRC Sec. 2040(a)
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