IRS Requirements/Appraisers

[The Warrior Monk]

I just got an interesting phone call, and don't have time to research the matter right now. If anyone knows the answer, please reply. It regards

1. valuation for estate taxation purposes; and
2. valuation for gifting purposes.

Does the IRS require the valuation be performed by a licensed appraiser in either of these circumstances?

References to IRS guidelines will make my day.

TIA

 

[Thomas Fiehler]

I have completed numerous appraisals for those reasons. I would suggest calling your accountant for the "chapter and verse" quotes.

 

[Elliott]

Require? I think the reasoning goes, you can send or not send anything
to the IRS, they will decide if its okay or you owe them more money. Most
attorneys who handle estates will require an appraisal be done by an
appraiser. The reports don't typically accompany the 'return.'

In the case of my mother's estate, we sold her house in a few months, and
listed its value at the sales price (less expenses). No appraisal.

 

[The Warrior Monk]

This situation pertains to a broker (i.e., no appraisal license) performing appraisals for estate taxation and gifting purposes.

 

[Proactive]

http://www.irs.gov/irb/2006-46_IRB/ar13.html

I too would like to see a definitive answer to David's question. The link above is for a bulletin regarding appraisal requirements for charitable contributions. I haven't found anything specific for estate/probate.

I occasionally hear that BPOs and assessed valuations are being used for estate purposes. A local real estate agent was once paid $2500.00 to value seven homes for estate settlement purposes. Not exactly chump change. When the family members got into a squabble over the values I was hired to settle the argument.

A specific IRS ruling regarding estate valuations would be a boon to capturing more of this market.

 

[Mike Kennedy]

Valuation of assets
... to the IRS for federal estate tax purposes. ... by a written, certified, independent appraisal by a qualified person who ... The appraisal must contain a statement to ...
[SIZE=-1]http://www.irs.gov/charities/foundations/article/0,,id=137651,00.html[/SIZE] [SIZE=-1]- 17.5KB[/SIZE]



Real Estate

Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary.

The appraiser must be thoroughly trained in the application of appraisal principles and theory. In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions.

The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant.

In general, there are three main approaches to the valuation of real estate. An appraisal may require the combined use of two or three methods rather than one method only.

http://www.irs.gov/publications/p561/ar02.html#d0e1059