Inheritance Taxes – first you need to know what what the property is worth.
This post will explain what you need to know about the value of real estate when it’s time to file inheritance taxes or to settle an estate.
Filing inheritance taxes or settling an estate is not something most people do every day. And the first thing you need to know is what the property is worth.
So, from a real estate value concern, our company will do all we possibly can to make sure you are well prepared.
Below is a quick breakdown of what the process typically looks like when our office prepares appraisal reports for the purposes of filing inheritance taxes or to settle an estate.
Hopefully, this information will help to make a confusing or stressful situation a bit more clear.
This post will explain what you need to know about the value of real estate when filing inheritance taxes or settling an estate.
Appraisals for Filing Inheritance Taxes
Inheritance Taxes (or Estate Taxes) are usually filed within a year of inheriting property and this can be a very stressful time period for the family.
We believe that our appraisal practice needs to remain human while asking the right questions during this difficult time.
These conversations require compassion and patience because quite often, the family members don’t even know where to begin…. We are always doing our best to be as helpful as possible.
The IRS has certain guidelines that must be followed and these rules are as clear as mud.
So, an Estate Attorney or Accountant would be the best person to ask for guidance regarding the details of those rules.
But, here is one thing that is clear: In order to file Estate Taxes, you will need to know what the property is worth.
So, one of the first things you will need is an appraisal of the property you have inherited.
The appraisal report completed for the purpose of filing inheritance taxes is much different from a report that you would receive when buying or refinancing a house.
The details of the appraisal report for inheritance taxes should include:
- Specific language within the report defining fair market value according to IRS guidelines.
- Extensive historical research and analysis regarding the inherited house and the comparable sales.
- The estimate of value is typically based upon the date of death.
Because we are usually estimating value based upon a date in the past, these appraisal reports are also known as retrospective appraisals.
Sometimes, there will be two values needed:
- date of death
- current value.
The current value is often needed if many months (or sometimes years) have passed since the date of death and the the heirs have decided to either list the property for sale or sell to a family member.
Every estate is different.
What’s most important is that the appraiser understands the purpose of the appraisal to ensure the client’s needs can be met appropriately.
Since the estate appraisals are a very specific type of valuation it is also important that you are working with the right appraiser for you.
You will want an appraiser who has experience in completing appraisal reports for the IRS..
We have been completing appraisals for filing inheritance taxes since 2004.
Our goal is to provide you with a reliable appraisal report while being mindful of how difficult we know this experience is for you and your family.
Contact us today so that we can discuss your situation and come up with a plan that best serves your needs.
