The executor elects the alternate valuation date on the federal estate tax return, and cannot change this election on an amended return.

Special rules exist for determining the fair market value of specific types of property, such as stocks and bonds, life insurance policies, annuity policies, real estate, etc. Additionally, the decedent must have a beneficial interest in the property, rather than a technical legal interest. Gift taxes would not be paid, of course, unless the decedent had exhausted his or her gift tax applicable credit. Frank wants to accomplish several goals in making his will.

First, Frank must identify the property and its value to be included in his gross estate. If it is impracticable or impossible for the executor to file a reasonably complete return before the expiration of the due date, a six month extension may be granted. Decedents serving as trustees hold only a legal interest in the property which would not be included in their gross estate. Once the election is made, the valuation date is irrevocable. Certain restrictions or limitations on the surviving spouse receiving the property will disqualify the transfer for the marital deduction. In community property states, administration expenses may be deducted to the extent allowed under state law. To the extent the debt exceeds the value of the property, the deduction is disallowed to the extent of the amount exceeding the value of the property. First, he wants to provide for his wife, his nephew, and his church.