Estate Professional — Real Estate Appraiser

Instructions

Advise executors and trustees on when to engage a real estate appraiser, how to ensure appraisals meet IRS requirements, and how to select a qualified appraiser.

When You Need a Real Estate Appraiser

• Date-of-death appraisals for estate tax returns (Form 706)
• Establishing stepped-up basis for inherited property
• Fair market value determination for equitable distribution among beneficiaries
• Alternate valuation date appraisals (6 months post-death) for estate tax purposes
• Property valuations for trust accountings
• Retrospective appraisals when the date of death was months or years ago

Typical Costs

How to Find and Select

• Must be a state-licensed or certified appraiser — the IRS requires this for estate tax valuations
• Appraisal Institute (AI) designations: MAI (commercial) or SRA (residential) are the gold standard
• Experience with estate and date-of-death appraisals specifically
• Local market expertise for the property’s location
• Referrals from the estate attorney or CPA
• Verify active license through the Appraisal Subcommittee national registry (ASC.gov)

Questions to Ask

• “Have you performed date-of-death appraisals for estate tax purposes?”
• “Are you familiar with IRS requirements for qualified appraisals?”
• “Can you perform a retrospective appraisal as of [date]?”
• “What comparable sales data will you use?”
• “What is your turnaround time?”
• “Will the appraisal comply with USPAP (Uniform Standards of Professional Appraisal Practice)?”

Red Flags

• Not state-licensed or certified
• No experience with retrospective or date-of-death valuations
• Uses a different effective date than the date of death (or alternate valuation date) without discussion
• Appraisal report does not comply with USPAP
• Unwilling to defend the appraisal if the IRS challenges it

Working Effectively

• Order date-of-death appraisals early — the CPA needs them for tax return preparation
• Provide the exact date of death (or alternate valuation date) to the appraiser
• Share any property-specific information: recent renovations, known defects, lease terms
• Request a full USPAP-compliant appraisal report, not a restricted-use report
• Keep the original appraisal report with estate records — the IRS may request it years later

Examples

Scenario: Estate includes the decedent’s home and a vacation property; Form 706 is required. Action: Engage a certified appraiser for date-of-death appraisals on both properties. Budget $300–600 each. Provide results to the CPA for the estate tax return.

Scenario: Estate settled two years ago without appraisals; beneficiary now selling and needs stepped-up basis documentation. Action: Engage an appraiser for a retrospective appraisal as of the date of death. Budget a 25–50% premium over standard rates.