Appraisal of Real Property for Step-Up Basis
This type of appraisal is for tax purposes on a property that is passed to heirs/beneficiaries.
• The IRS will allow the estate to have the property appraised as of the date of death, or a date six months from the date of death.
• The client may ask you to do a valuation as of both effective dates, which you will treat as two different assignments, even
though it will require only one inspection.
• If the IRS finds that the value of the entire estate is under the allowable limit, then no estate taxes need to be paid.
• The fair market value of the property as of the effective date will become the basis of value for the property (stepped-up from the value when it was originally purchased by the decedent)
• Then the heir or heirs will only be liable for any taxes on the gain in value (profit they realize), if and when they sell it.
• In this assignment, you will identify the intended use as “establishing taxable basis”
We can provide you with a professional appraisal report that will put you at ease when making one of the most important decisions of your life.