Which of the following is true about gross estate valuations?

The statement regarding the use of Fair Market Value (FMV) to evaluate transferred gifts is accurate in the context of gross estate valuations. When someone gives a gift, the FMV of that gift at the time of the transfer is essential for determining its value in the context of the donor's estate.

When a decedent passes away, the FMV of their assets is required to calculate the total value of the gross estate. This includes any gifts made during the individual's lifetime that exceed the annual gift tax exclusion limit, which must be included in the estate if they are made within three years of death. Fair Market Value provides a standardized measure for valuing assets at their current market rate rather than their purchase price or any depreciated value.

In contrast to this, the other options do not accurately reflect the principles of gross estate evaluation. The first option is misleading, as gross estate valuations account for all assets, not just those with tax implications. The third option incorrectly states that appreciated value is disregarded; in fact, appreciation is a key aspect of determining the value of assets in the gross estate. Lastly, the assertion that all gifts are exempt from gross estate evaluation is false because certain gifts made within a specific timeframe before death must be included in the gross