Date of Death Appraisal in General
When a loved one dies, it is often a hectic and emotional time trying to make funeral arrangements and grieve the loss of a special person. Even when a person inherits property, it can often be an overwhelming experience. After a month or two, most people are ready to turn their attention to settling the estate of the deceased. When a family farm in Potter County, a private residence in the suburbs, or office building in downtown Amarillo is part of the estate, a retrospective appraisal is required to settle the estate and to establish the basis for any estate taxes owed to the IRS. A historical or date of death appraisal establishes the valuation of a property at the time of death of the owner.
As an example, if a person was to inherit their uncle's dairy farm in Potter County, about two to six months after the person's uncle had died the heir would need to arrange for a qualified professional to do a retrospective appraisal. In order to have the appraisal accepted by the IRS, the appraiser must meet stringent requirements concerning their educational and experience. Additionally, the appraiser must have expertise working according to the IRS Real Property Valuations. Moreover, most appraisers who handle historical appraisals are sensitive to emotions people are going through after the loss of a loved one.
The appraiser will inspect the property and review tax records, MLS listings, deeds, plat information, and other historical records related to the property. Based upon this information, the appraiser will formulate and document his or her opinion as to the fair market value of the property at the time the owner died. The appraiser can also provide the heirs of family farms information about the $1,000,000 reduction of value allowed by the IRS as per IRC2023 for the purpose of calculating the estate tax.
How to Prepare for a Historical Appraisal
In order to ensure the appraiser has as much information as possible to base his or her appraisal, gather all deeds, records of the inspections of the property, and any photographs of the property. This will help the appraiser give an accurate retrospective appraisal for the property.