Jim inherits stock from his brother, who died in March, when the property had a $6.9 million FMV. This property is the only property included in his brother's gross estate and there is a taxable estate. The FMV of the property as of the alternate valuation date was $6.7 million.
a- Why might the executor of the brother's estate elect to use the alternate valuation date to value the property?
b- Why might Jim prefer the executor to use FMV at time of the death to value the property?
c- If the marginal estate tax rate is 40% and Jim's marginal income tax rate is 25%, which value should the executor use?