Estate Planning & Gift Tax

Who orders this appraisal

• Estate attorneys
• CPAs
• Executors
• Families transferring property

What the engagement covers

• IRS-compliant reports
• Date-of-death valuations
• Gift tax documentation
• Estate settlement support

The rules that govern it

IRC §2512. Gifts are valued at the date of the gift, Not the date of death, and not today. A lifetime transfer is valued at its fair market value on the day it was made. If the gift was years ago, that is a retrospective assignment, and the further back it sits, the more reconstruction it takes.

Form 709, when a return is required, A return is due where gifts to any one donee exceed the annual exclusion, where spouses elect to split gifts (both must file), for any gift of a future interest regardless of amount, for a terminable interest given to a spouse, and for outright gifts to a non-citizen spouse above the special exclusion.

The annual exclusion: per donee, and it moves, The exclusion applies per recipient, not per donor, so gifts to three children are measured separately. The amount is adjusted periodically and has changed repeatedly in recent years. Confirm the current figure with your CPA rather than any website, this one included.

Adequate disclosure, the reason the appraisal matters, This is the part most donors never hear. When a gift is adequately disclosed on a timely Form 709, which for hard-to-value property effectively means supported by a qualified appraisal. The limitations period on the IRS revaluing that gift begins to run. Disclose inadequately and the Service can revisit the value long afterward, including at death, when the original market is cold and your evidence has gone stale. The appraisal is not really about this year's tax. It is about closing the window.

Fractional interests, two different experts, Where an undivided or fractional interest is transferred, two questions arise: what is the whole property worth, and what is a partial interest in it worth. A real estate appraiser answers the first. Discounts for lack of control and lack of marketability are normally the province of a business valuation appraiser. Expect two reports, and be wary of anyone offering both without the credentials for both.

How it works

1. Fix the effective date: the date of the gift, which is frequently in the past.
2. Establish exactly what is being transferred: the fee, an undivided fractional interest, or a remainder with a retained interest. That determines the assignment.
3. Coordinate with the CPA or attorney preparing Form 709 on what the return needs, before the report is written rather than after.
4. Develop value to the qualified appraisal standard so the disclosure holds up.
5. Where a fractional interest is involved, hand off to a business valuation appraiser for the discount analysis.

What you receive

Qualified appraisal meeting IRS reporting requirements. Standard turnaround is 1–3 weeks. Rush appraisals available for urgent deadlines.

Common questions