Why Your Accountant Wants an Appraisal (and It's Not Just Busywork)
Ever get a seemingly random request from your accountant or lawyer? Maybe it involved getting an appraisal for a property you own. It can feel like an extra step, but there are important reasons behind it.
Benefits Beyond Fair Division
Sure, an appraisal ensures everyone inherits a fair share, especially with multiple properties. But there’s a bigger advantage: minimizing your heirs’ tax burden.
Step-Up In Basis: A Tax Advantage for Heirs
The Tax Foundation defines Step-Up In Basis as “The step-up in basis provision adjusts the value, or “cost basis,” of an inherited asset (stocks, bonds, real estate, etc.) when it is passed on, after death. This often reduces the capital gains tax owed by the recipient. The cost basis receives a “step-up” to its fair market value, or the price at which the good would be sold or purchased in a fair market. This eliminates the capital gain that occurred between the original purchase of the asset and the heir’s acquisition, reducing the heir’s tax liability.”
Here’s the key concept: step-up in basis allows the inherited asset’s cost basis (the original purchase price) to be reset to its fair market value on the date of inheritance.
For a full understanding of the Step-Up Basis, visit Tax Foundation.
Where Does the Appraisal Come In?
An appraisal is a professional opinion of value of an asset, like your house. The state certified report provides a written opinion of market value from an independent expert. This becomes crucial for accurately applying step-up basis and minimizing potential tax liabilities for your heirs.
Taking Charge of Your Legacy
Getting an appraisal is a proactive step towards a smoother estate transition. It provides peace of mind, knowing your assets will be distributed as intended and your loved ones benefit from potential tax advantages.
Ready to Get Started?
Let our team of experts provide you with a top-quality appraisal at a competitive rate. Contact us today for a free quote and experience the difference a professional appraisal can make for your estate plan.
For a deeper understanding of step-up basis and its implications for your specific situation, we highly recommend consulting with a qualified tax advisor or estate planning attorney.
Please note: Regional Real Estate Appraisal Service is here to provide appraisal services, not financial or legal advice. For matters related to step-up in basis or inheritance, we recommend consulting with qualified legal or financial professionals.
considering ordering an appraisal or have a question?
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An appraisal fee for a property is determined by several factors, including its location, uniqueness, and the intended use of the appraisal report.
If you’re in need of a commercial or residential property appraisal, please complete the contact form to get in touch with us.
Our team of experienced appraisers will take the time to understand your specific needs and requirements, and provide you with a customized quote for our appraisal services.
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Phone: 845-786-7374
Email: orders@regionalvaluations.com