Appraisals for Estate Tax and Estate Planning Purposes 

Many of our appraisal assignments are for estate purposes of one sort or another. Usually the date of value for such appraisals is the date of the decedent's passing. There are numerous reasons why we might be appraising real properties in the estate. For example, a person who passed has left behind an estate which includes real properties. If the decedent has a will or a trust we could be appraising the property for the heirs of the decedent in order to determine the fair market value of the properties for distribution purposes. Alternately, if the decedent does not have a will or a trust, we could be engaged by the probate court or by a family member in order to inform the probate court.

Along the same lines, we complete appraisals for determination of the step-up in basis value of the property as of the date of passing. Future capital gains taxes could be calculated from this basis. On the other hand, the decedent's estate could be taxable, in which case all assets (except cash and cash-like instruments) will require valuation.

Real estate appraisal is an essential part of estate IRS reporting. This is because the IRS requires that you provide an accurate estimate of the fair market value of any real estate that is part of an estate. There are a variety of reasons why you may need to provide this appraisal, including calculating estate and inheritance taxes, distributing assets among heirs, and establishing a basis for future capital gains taxes.

<p>The process of a real estate appraisal involves evaluating the property's location, condition, and recent sales of similar properties in the area. The appraiser will consider factors such as improvements or renovations made to the property, the size of the lot, and any potential environmental concerns. They will also take into account any unique features of the property that may make it more valuable, such as waterfront access or proximity to desirable schools or amenities. Once the appraiser has evaluated the property thoroughly, they will calculate the fair market value of the property. The fair market value is the price that the property would reasonably sell for on the open market, assuming that both the buyer and seller are knowledgeable about the property and are not under any duress to complete the transaction.</p>

The fair market value of the property is essential for determining any tax liability associated with the estate. Generally, if the value of the estate exceeds a certain threshold (which can vary based on the year of the decedent's death), the estate will be subject to federal estate taxes. The fair market value of any real estate included in the estate will be used to calculate the value of the total estate and determine any tax liability.

Once the fair market value has been established, it may also be used to determine the distribution of assets among the heirs. In cases where there are multiple beneficiaries, the appraisal can help ensure that each party receives an equitable share based on the individual value of the assets.

It is important to note that the appraisal should be conducted by a qualified professional who has experience in estate appraisals. In cases where the IRS disagrees with the appraised value, they may conduct their own appraisal and could potentially assess penalties or other fees if they find discrepancies.

Real estate appraisal is a critical part of estate IRS reporting. A professional appraisal can help ensure that the fair market value of any real estate included in an estate is accurately determined, which can help to avoid any tax penalties or disputes among heirs. If you are involved in estate administration or are a beneficiary, it is essential to work with a qualified licensed appraiser to ensure that.