date of death Appraisal
Date of Death Appraisal
The moment that ownership of an estate has been transferred due to inheritance or death, the heir is required to order a qualified appraisal. This is necessary because the new owner of the property needs to present a reasonable valuation to the IRS for tax liability assessment.
One of the most common types of property assessments is the date of death appraisal. In this case, the value of an estate is based on the market conditions on the date that the original owner died. More and more inheritors are choosing this style of appraisal because it allows them to have a longer period of time to process the formalities while still ensuring that the worth of the property remains unmoved. Normally, a date of death appraisal is ordered several months after the owner’s death. No matter when it is requested, there are three important considerations prior to ordering it.
There are time restrictions that the new owner needs to comply with as soon as he receives the ownership transfer to avoid additional tax obligations and penalties. The most common time frame for a date of death estate appraisal is within 6 months of the death of the original owner. At Alpharetta Home Appraiser, we advise this as the ideal time frame. However, it is still your decision as the intended new owner when to engage our services.
Alternative Date of Valuation
While the DOD (Date of Death) appraisal typically has a time frame of within six months, the IRS has arranged for mitigating circumstances through the acceptance of the Alternative Valuation Date. AVD is a valuation amount calculated six months after the death of the property owner. This can be an advantageous strategy for many beneficiaries, especially when there is a recession in the market. The fair market value of the property remains unaffected. Remember that if you select to use alternative valuation, you need to have two appraisals completed — the DOD and the AVD.
Depending on the market, you may find this very favorable for your tax obligations. You may be paying for two appraisals using the current market’s service fee, but your savings in the economic decline will overtake the appraisal cost. If you want a lesser service fee for the valuation, you can hire the same appraiser. With this, you may be granted a reduced cost.
Advice from an Attorney/CPA
In choosing the DOD or the AVD appraisal, you need to make sure that you carefully weigh the implications. In your estate planning, it is always beneficial to consult your attorney or a CPA, and discuss the pros and cons of your options. They are the best contact when it comes to taxation matters.
When it comes to an accurate valuation of your home, whether you are planning your estate, or have just inherited property from a loved one, Alpharetta Home Appraisers can guide you through the process. Our appraisers are all state certified with experience since 2001. Call us today at 678-791-4532 for more information and a free quote and consultation.