Estate tax valuation is a vital process in the administration of a deceased individual's estate in the United States. It involves determining the fair market value of all assets owned at the time of death, which forms the basis for calculating federal or state estate taxes. These assets may include real estate, investments, business interests, retirement accounts, personal property, and more.

The Internal Revenue Service (IRS) requires that estate tax returns, typically filed using Form 706, reflect accurate and well-documented valuations. Appraisals conducted by qualified professionals are often necessary for complex assets such as closely held businesses or unique real estate. Accurate valuation ensures compliance with tax regulations, reduces the risk of disputes, and facilitates equitable distribution among beneficiaries.

In some cases, alternative valuation dates may be used, depending on the circumstances and timing of asset transfers. Estate tax valuation also impacts decisions related to charitable deductions, spousal transfers, and generation-skipping transfers.

Understanding estate tax valuation is essential for executors, heirs, and tax professionals involved in estate planning or administration. Properly executed valuations help ensure a smooth legal process and minimize the risk of overpayment or penalties due to incorrect reporting.