IRS "date of death" Appraisal Report Format

[Frederick R. Ruffell]

Have never thought about this one and don't recall if it is in the IRS guidelines, I am being lazy and not looking it up as it is a question for a friend (not a client i.e. no $$). So I am putting it out to you guys.
Will the IRS accept a DOD appraisal done on a desktop form and SOW?
I never have used a desktop format and/or SOW and have always used a FNMA URAR amended to meet the IRS guidelines. I don't do a lot of IRS appraisals as of late and cant remember all the guidelines but I do have a separate template for the IRS appraisal reports.

 

[Russ Kitzberger]

Lending forms, including the URAR, will not include everything you need to meet IRS examination requirements. Many slip through the cracks, but IRS can fine you the appraiser personally for certain valuation mistakes.

For residential; Years ago, I engaged alamode to build a sales comparison main form for our firm; so we use that as the basic with the narrative around it including the full cost approach and other related IRS analysis and documentation.

I would just do a narrative and if you don't have a special sales comparison page, screenshot the sales comparison on your favorite form and paste it in the narrative doc.

 

[Frederick R. Ruffell]

Lending forms, including the URAR, will not include everything you need to meet IRS examination requirements. Many slip through the cracks, but IRS can fine you the appraiser personally for certain valuation mistakes.

For residential; Years ago, I engaged alamode to build a sales comparison main form for our firm; so we use that as the basic with the narrative around it including the full cost approach and other related IRS analysis and documentation.

I would just do a narrative and if you don't have a special sales comparison page, screenshot the sales comparison on your favorite form and paste it in the narrative doc.

Russ, Did you even read my post? As I said in the post "I have always used a FNMA URAR amended to meet the IRS guidelines." and " is a question for a friend (not a client i.e. no $$)" so I am not actually performing a valuation.
I am more concerned about the SOW that the IRS will accept, not the form or format, specifically does the IRS require a full interior and exterior inspection of the property by the Appraiser?
Thanks for your response I appreciate it but it was not helpful.

 

[George Hatch]

I've done a lot of these but I don't know what the answer is to that question. I've always done physical inspections except in a handful of assignments where the eff date was so far back the improvements are no longer there.

 

[Russ Kitzberger]

Mike, Did you even read my post? As I said in the post "I have always used a FNMA URAR amended to meet the IRS guidelines." and " is a question for a friend (not a client i.e. no $$)" so I am not actually performing a valuation.
I am more concerned about the SOW that the IRS will accept, not the form or format, specifically does the IRS require a full interior and exterior inspection of the property by the Appraiser?
Thanks for your response I appreciate it but it was not helpful.

Thank you for clarifying, my mistake for passing over that you amend it. How do you remove the language in the URAR form for lending?

I don't recall a specific inspection level requirement, however, the condition must be included and if you cannot access the property and the DOD is recent and the estate or inheritors are in control, then there could be a question of if the decedent had control of the asset. In the same, gov has accepted desktop-level inspections on some of the work I have done directly for the users including the Treasury under extenuating circumstances known to the US Marshals.

 

[Sadie]

I would do either a pre 2005 1004 which does not have the lending language in it or a GPAR. You have no control over what happens to your report after you it leaves your hands.

 

[Terrel L. Shields]

Will the IRS accept a DOD appraisal done on a desktop form and SOW?

Prolly not. I think they require a summary for gifting, BUT the cost basis appraisal isn't for the IRS. The DOD appraisal for a cost bump up is just support for the person and their CPA to estimate the capital gains. If the IRS contests it, they are likely going to do their own appraisal. If you present the appraisal you prepare then they might look it over and dispute it and there isn't much you can do except go to tax court if they disagree.

 

[Mark K]

I think you'd need to contact the IRS and ask them. I've done quite a few DOD reports knowing that it might go to the IRS and have read thru their guidelines. I've never read anything that specifically allows or prohibits them but I think that their expectation would be something similar to a GP form at a minimum.

They may say something like ...."whatever is commonly used by your peers" or something ambiguous like that. The peers that I know would not use a desktop in this case and I've always insisted on interior inspections for these.

 

[Tim The Enchanter]

GPAR form for sure. It is pretty similar to the Fannie form, but different fine print.

 

[Frederick R. Ruffell]

I've done a lot of these but I don't know what the answer is to that question. I've always done physical inspections except in a handful of assignments where the eff date was so far back the improvements are no longer there.

Hey George,
Yeah that has been my MO too. My friend has been setteling her moms estate and received a "desktop appraisal" for the DOD assignment. I have told her to check with the Lawyer if that will fly with the IRS. Im not sure about the IRS requireing a full interior/exterior inspection. Guess I may have to dig into the IRS code.