Estate Planning Appraisals
Qualified Appraisals for IRS Purposes

Settling one’s estate and personal affairs can be a difficult and stressful task, add on to it the emotions that revolve around these types of issues and it can be downright daunting. Life is complex enough, let us handle your complex valuation problems for tax purposes. The IRS requires real estate appraisals in many circumstances such as estate filings, inheritance, gifts, and donations. Lake State Realty understands your needs and the requirements needed for you to comply with your mandatory duties as it relates to the IRS. Our IRS-qualified appraisers have worked closely with financial planners, tax professionals, attorneys, and estate planners to provide the most accurate valuation information so that they can develop the best strategies for their clients. 

We can complete IRS-qualified appraisals in accordance with the IRS Real Property Valuation Guidelines. It is important to choose an appraiser that is familiar with and understands the IRS Real Property Valuation Guidelines because taxpayers may be liable for a penalty if the valuation does not adhere to those guidelines. Penalties can range from approximately 20-40%.

Appraisals for Estate Planning

When a loved one passes away, it can be one of life’s most challenging events. At this difficult time, there is a series of legal processes that are needed to reallocate ownership of the estate’s assets to the beneficiaries. The sum of the assets must be determined to decide estate taxes and when real estate is involved, it requires a real estate appraisal for each property. These legal processes are always a lot easier and less time intensive when there is a recent real estate appraisal on file for each property in the estate. Obtaining periodic appraisals of your properties can save your beneficiaries a lot of time, hassle, and expense. 

If your estate plan involves gifting real property or its interests, the IRS requires a valuation to support the amount of the gift.  Lake State has helped many property owners support the value of ongoing annual gifts or donations of real property or its interests, standing up to the scrutiny of the IRS appraisal reviewers. We provide rock-solid appraisals that stand up to the most intense scrutiny and put you in the best position to protect your estate. We will work closely with your accounting and legal teams to make sure that all residential and commercial real estate valuations are fully supported and defensible to put you in the best position to preserve your hard-earned estate. 

Appraisals for Inheritance

On top of the agonizing process of mourning, there is a lot on the plate for the executor of a will to do after the death of a beloved. If the estate includes any real estate, the executor must work closely with a litany of real estate professionals to facilitate the settlement process and ultimately fulfill the wishes of the departed. At this point in the process, it is very important that you have an appraisal completed as of the date of death, sometimes referred to as a date of death appraisal.  

The date of death appraisal is used to establish an accurate value of a property when it is inherited, known as the initial adjusted basis.  When the property is sold in the future, possible taxation of capital gains is based on the difference between the sales price and the adjusted basis (adjusted basis includes the initial adjusted basis and any monies for improvements). Since it may be many years before the property is sold, it is important to have an accurate and contemporaneous appraisal completed around the time of inheritance. A historic or forensic appraisal that is completed years later at the time of sale, is often impractical, difficult, costly, and likely less accurate than if completed around the effective date of valuation years prior. 


Date of Death Appraisal Done for Inheritance

Billy Bob bought a home on White Bear Lake in 1995 for $250,000. Billy Bob then passes away on May 19th 1999 and leaves the house to Mary Jo. Mary Jo will keep the house until 2022 and then sells it for $2,150,000. If she did not get an appraisal in 1999, when sold in 2022, it will be very difficult to find an appraiser (and expensive) to obtain the necessary sales data to support the value 23 years prior. Additionally, the appraiser will find it difficult to obtain the necessary sales date to support value 23 years prior. Without knowing the true value of the property when inherited in 1999, Mary Jo may have a significant capital gain, based on the difference between the 1999 value and the 2022 sales price. Although it is best to avoid this situation with an appraisal at the time of inheritance, the professionals at Lake State Realty have over 35 years of experience and can perform accurate retroactive appraisals for many property types and locations.

We understand the ins and outs involved in valuing real estate at a time when the family is mourning the loss of a loved one. Lake State Realty is compassionate and understanding during this difficult and stressful time for the family. 

Appraisals for Donations

Donating your real property or some of its interests to a charitable organization is a fantastic way to potentially lower your tax liability to the IRS. Appraisals for real estate are required when the fair market value of the donation exceeds $5,000. We have the experience necessary to provide a defensible appraisal to provide the fair market value of your donation. We can help reduce any red-tape and make your donations go smoothly to the organizations that you want to help.

We have worked closely with property owners, financial planners, tax professionals, attorneys, and estate planners to provide the most accurate valuation information so that they can develop the best strategies for their clients. We pride ourselves in providing accurate, timely, and reliable real estate valuations for estate and personal planning purposes.  We are one of few firms performing IRS-qualified appraisals consistent with IRS Appraisal Requirements that support the value of the donation for taxation purposes, signing the Declaration of Appraiser on IRS form 8283, Part IV.       


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