The Estate CollarThe Estate Collar
It was in the depths of the Great Depression that the alternative valuation mechanism was first put into place. Federal lawmakers realized that forcing an estate to pay taxes on its assets' value the exact day a wealth owner died might mean, when stock values were dropping, that the estate paid too much. After all, the stock wouldn't be sold on that date of death (DOD), but some time later. In 1935,
Robert N. Gordon & Kirk Hoopingarner
It was in the depths of the Great Depression that the alternative valuation mechanism was first put into place. Federal lawmakers realized that forcing an estate to pay taxes on its assets' value the exact day a wealth owner died might mean, when stock values were dropping, that the estate paid too much. After all, the stock wouldn't be sold on that date of death (DOD), but some time later. In 1935, the lawmakers said they had to do something in response to “the hardships that were experienced after 1929 when market values decreased very materially between the period from the date of death and the date of distributions to the beneficiaries.”1
Today, Internal Revenue Code Section 2032 allows fiduciaries ...
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