For federal estate tax purposes, the value of the gross estate six months after the date of death, or, if the assets are disposed of within those six months, as of the date of disposition. The alternate valuation date election can be used only if the value of the gross estate declines.
In an estate-tax return, IRS Form 706, the executor can choose to value the estate by its fair market value on the decedent's date of death, or on the alternate valuation date, precisely six months after the date of death. If the assets have declined in value, this may be a useful tool to cut estate taxes.