Form 706 Extension – Special Use Valuation

SPECIAL USE VALUATION. The decedent’s estate executor filed the Form 706 late and included a request for a 12-month extension of time to make the special use valuation election. However, the executor failed to comply with all the requirements of Treas. Reg. § 301.9100-2. Treas. Reg. § 301.9100-2(a)(2)(vii) provides an automatic 12-month extension of time to make the estate tax election to specially value qualified real property (where the IRS has not yet begun an examination of the filed return) under I.R.C.§ 2032A(d)(1) provided the taxpayer takes corrective action as defined in Treas. Reg. § 301.9100-2(c). Under Treas. Reg. § 301.9100-2(c), corrective action means, for those elections required to be filed with a return, filing an original or an amended return for the year the regulatory or statutory election should have been made with attachment of the appropriate form or statement for making the election. The IRS ruled that, because the intended to make the election prior to the IRS examination of the Form 706 and immediately sought an extension of time after the IRS ruled the election invalid, the estate would be granted an extension of time to file the special use valuation election. Ltr. Rul. 201652017, Sept. 19, 2016.

The case summary is from Vol 28 No. 1 of the Agricultural Law DigestClick here for information on how to subscribe to the Digest.

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