Estate Appraisals/Retrospective Appraisals

Learn More About Estate Appraisals

We know that managing or settling an estate can be a difficult task. As the trustee, executor or professional advisor, you have many things you need to deal with and we want you to know that you can count on us to act quickly and with as much sympathy and confidentiality as possible.

There are many situations where you need an experienced, qualified, and certified appraisal expert. A professional appraisal gives the executor solid facts and figures needed to make decisions, support their fiduciary responsibilities and ensure peace of mind for all parties.

Establishing New Basis

The most common scenario is to determine the fair market value as of the date of passing of the decedent, commonly referred to as a date of death appraisal. When a beneficiary inherits property from a decedent, the property receives a step-up in basis to its value on the date of death. This “step-up in basis” can be a significant income tax benefit for beneficiaries and needs to be documented by an appraisal.

Retrospective Value

In many cases, the appraiser is requested to establish the value of a property when the date of death was months or sometimes years in the past, these are referred to as retrospective appraisals or historical appraisals. These are also typically used to establish the stepped-up basis in a property for estate planning and tax filing purposes. Having been in business since 1989, we access to historical real estate data going back decades.

Buy-out or Selling an Inherited Property

In some scenarios, one of the heirs may wish to buy-out the interest of the other heirs and retain the property personally or the executor may be required to sell the property. In either case, a professional, unbiased appraisal should be obtained to document the value and support the executor’s decisions and fiduciary responsibilities.

Estate Tax Returns

Estate tax returns are required whenever the total value of the decedent’s assets exceed the applicable filing thresholds. Appraisals are often required to determine the value of the real estate holding of the estate to assist in deriving the total value of an estate and documenting the value for the tax return.

Charitable Contributions and Gift Tax

For non-cash charitable contributions and for gift taxes, IRS Tax Return Regulations (26 CFR part 1) requires taxpayers to obtain a “qualified appraisal” on real property by a “qualified appraiser”. A separate qualified appraisal and a separate Form 8283 are required for each property, the appraiser must complete Part III of Form 8283.

A “qualified appraiser” is an individual who has earned an appraisal designation from a recognized professional appraiser organization, if the designation is awarded on the basis of demonstrated competency in valuing the type of property for which the appraisal is performed, or has otherwise met minimum education and experience requirements set forth by the Secretary.

Appraisals used in planning an estate and in documents filed with the revenue authorities should be well supported by a detailed report prepared by a qualified and certified real estate appraiser. The report should document how the appraiser arrived at their conclusions and demonstrate to the user that the appraisal is well founded, substantiated, and meets with Treasury Regulations and state agency requirements. Additionally, the IRS looks at the accreditation of the appraiser, the rationale of the “Fair Market Value” opinion, the validity of the comparable research, and the overall professionalism of the appraisal report.

Estate Appraisal Report Recommendations

Valuation Technology provides accurate, well-developed appraisals available in a variety report formats tailored to complement the different needs in the estate and tax return filling process. We leverage our long-standing expertise and technology to deliver well-substantiated appraisals.