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IMPORTANT IRS REGS PERTAINING TO 706 VALUATIONS
IRS Regulations

IRS Reg. 20.2031-2(b):  If there is a market for stocks or bonds, on a stock exchange, in an over-the-counter market, or otherwise, the mean between the highest and lowest quoted selling prices on the valuation date is the fair market value per share or bond. If there were no sales on the valuation date but there were sales on dates within a reasonable period both before and after the valuation date, the fair market value is determined by taking a weighted average of the means between the highest and lowest sales on the nearest date before and the nearest date after the valuation date.
IRS Reg. 20.2031-8(b):  The fair market value of a share in an open-end investment company (commonly known as "mutual fund") is the public redemption price of a share. In the absence of an affirmative showing of the public redemption price in effect at the time of death, the last public redemption price quoted by the company for the date of death shall be presumed to be the applicable public redemption price. If there is no public redemption price quoted by the company for the applicable valuation date (e.g. the valuation date is a Saturday, Sunday, or a holiday), the fair market value of the mutual fund share is the last public redemption price quoted by the company for the first day preceding the applicable valuation date for which there is a quotation.
IRS Reg. 20.2032-1(1):  This section provides for the valuation of a decedent's gross estate at a date other than the date of the decedent's death.
IRS Reg. 20.2032-1(2):  Any property not distributed, sold, exchanged, or otherwise disposed of within 6 months after the decedent's death is valued as of the 6 months after the decedent's death.
IRS Reg. 20.2032-1(3):  Any property, interest, or estate which is affected by mere lapse of time is valued as of the date of the decedent's death, but adjusted for any difference in its value not due to mere lapse of time as of the date 6 months after the decedent's death, or as of the date of its distribution, sale, exchange, or other disposition, whichever date occurs first.
IRS Reg. 20.2031-2(i):  In any case where a stock dividend is declared on a share of stock before the decedent's death but payable to stockholders of record on a date after his death and the stock is selling "ex-dividend" on the date of the decedent's death, the amount of the dividend is added to the ex-dividend quotation in determining the fair market value of the stock as of the date of the decedent's death.

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