In CCA 201926013, the IRS informally advised that despite a valid 2032 election, the alternate valuation values can only be used if the result would be a lower gross estate and a lower combined estate and GST tax. Here, the 2032 election was a protective election that would have allowed for the alternate valuation date to be used if it had been subsequently determined that the combined taxes would have been lower based on the alternate valuation date rather than based on the date of death values.
Code Section 2032(c) is controlling and provides that “No election may be made under this section with respect to an estate unless such election will decrease (1) the value of the gross estate, and (2) the sum of tax imposed by this chapter and the tax imposed by chapter 13 with respect to property includible in the decedent’s gross estate (reduced by credits allowable against such taxes).”
IRS CCA: Using Date of Death Value When Results in Lower Combined Estate and GST Tax (IRC §2032). Bloomberg Law.