Updated July 31, 2026. Quick answer: IRC §2032 lets an estate value everything as of 6 months after death instead of the date of death — but only if the election reduces BOTH the gross estate value AND the estate tax owed. It exists for one scenario: markets fell after the death. And it carries a cost almost every summary omits: the heirs’ stepped-up basis drops to the lower value too, which converts an estate-tax saving into a future capital-gains bill for the beneficiaries.
The mechanics
The election is made on the estate tax return, covers the whole estate (no cherry-picking dates asset by asset), and anything sold or distributed during the six months is valued as of its disposal date, not month six. Because both tests must be met, the election is useless to estates owing no tax — a portability-only filer cannot use it to shrink the survivor’s numbers.
Who should actually check it
Taxable estates heavy in marketable securities or real estate, where a market drop after the death is real and measurable. The comparison to run: estate tax saved today versus capital gains created for heirs tomorrow at the lower basis — a family in the 0–15% capital-gains brackets keeps more of the trade than one in the top bracket. The basis side of the ledger, computed: inherited home sale capital gains. The whole calendar: the deadlines calculator.
A six-month snapshot with a two-generation price tag.
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