How are "wasting assets" valued at the time of death?

Wasting assets, which are assets that deplete over time, such as certain types of real estate or personal property, are valued at their value on the date of death. This approach is fundamental to estate planning and ensures that the value of the asset reflects its condition and market dynamics at the time of the decedent's passing. The fair market value on the date of death provides an accurate assessment for the estate, helping to determine any estate taxes due and properly allocate the asset among beneficiaries.

Valuing wasting assets at the date of death captures their actual worth considering depreciation and any factors that may affect their value at that specific time, rather than relying on projected future values or historical costs that may no longer reflect their current state. This method aligns with general principles of estate taxation, which typically assess assets based on their fair market value as of the moment of death, ensuring a fair distribution and adherence to the legal requirements of estate settlement.