KO Appraisal
Guide

Date of death appraisal

A date of death appraisal establishes what a property was worth on the day its owner died. That number sets the heirs’ new cost basis for capital gains, and supports the estate’s tax filings if any are required. It is one of the most commonly needed and most commonly delayed appraisals there is.

Why it matters even when no estate tax is owed

This is the single most common misunderstanding. Under IRC §1014, inherited property takes a new income tax basis equal to its fair market value at the date of death. That step-up applies whether or not the estate is large enough to owe any estate tax.

Without a documented date-of-death value, heirs who later sell may be unable to substantiate the basis they are claiming, and the capital gains exposure can be far larger than any estate tax would have been. California levies no estate or inheritance tax of its own, which leads many families to assume no valuation is needed. The federal basis rule still applies.

It is not too late

Executors routinely come to this months or years after the death, usually when a CPA asks for the basis figure. That is normal and workable. A retrospective appraisal reconstructs value as of the date of death using sales that had closed by that date, disregarding everything the market did afterward. The report discloses that the effective date precedes the inspection.

The alternate valuation date

An executor may elect under IRC §2032 to value the estate six months after death instead. The election is available only if it does both: reduces the gross estate and reduces the estate tax due. It cannot be elected merely because the later number is preferable. Where it is under consideration, a value at each date may be needed to determine whether the election is even available.

Why a market analysis is not a substitute

A comparative market analysis is a pricing opinion prepared by someone with a commission interest in the eventual sale. An appraisal is an independent opinion under USPAP by a state-certified appraiser with no stake in the number. If the return is examined, that difference is exactly where the problem surfaces.

Common questions

How much does a date of death appraisal cost?
It depends on property type, complexity, and how far in the past the effective date sits. Older effective dates require more data reconstruction. Every engagement is quoted at a fixed fee before it begins, so there are no surprises.
When should it be done?
As soon as practical after death, while records and property condition are easiest to establish. But a retrospective appraisal can be prepared years later, and often is.
Who orders it. The executor or the heirs?
Usually the executor, administrator, or successor trustee, often at the direction of the estate's attorney or CPA. The report is addressed to whoever will rely on it, which matters for who can use it later.
Do I need one for each property?
Yes. Basis is established per asset, so each parcel of real property needs its own supported value as of the date of death.
Who wrote this Kevin O'Brien, MAI, SRA. California Certified General Real Estate Appraiser #3005065, issued by the California Bureau of Real Estate Appraisers (BREA). Practicing in San Diego. This page reflects how these assignments are actually handled, not a summary of other people's summaries.
Where this applies Appraiser licensing is state-specific, there is no national appraisal licence, so appraisal engagements here are California properties, primarily San Diego County. The valuation methodology and the federal tax rules described above apply anywhere in the United States; if your property is in another state, you need an appraiser credentialed there, and this page should still tell you what to ask them for.

Related reading

Next step

Tell me about the property.

Most assignments start with a short call, property type, the purpose of the appraisal, and the deadline you are working against. You get a fixed quote before any engagement, never contingent on the value reached.

Typical commercial fees range $2,000–$4,000. Residential and simpler assignments quote lower. Every engagement is quoted in advance, so the figure is known before work begins.

Call 760-685-8036residential Request a quote