Problem: Among the assets included in Jude’s gross estate are the following:
Fair Market Value
Six months after
Date of Death Date of Death
Stock in Avocet Corporation $2,000,000 $1,800,000
Stock in Coot Corporation 800,000 900,000
Real estate 700,000 700,000
Three months after Jude’s death, his executor sells the Coot stock for $850,000.
Q1. What is the amount of Jude’s gross estate if date of death value is used?
Q2. What is the amount of Jude’s gross estate if the alternative valuation date is elected?
Q3. Suppose all of Jude’s assets pass to his surviving spouse. Does this have any impact on the choice of valuation date? Explain.