The IRS deadline for Estate Tax returns is nine months after the date of death. A six-month extension is available if requested prior to the due date and the estimated correct amount of tax is paid before the due date. Gift tax returns are due on April 15th following the year in which the gift is made.
Estate appraisals are typically issued based on the date of death, however, the IRS also accepts appraisals that are within six months of the date of death. Depending on changing market conditions it can benefit the estate to have an earlier or later date of valuation. The IRS reviews all major real property appraisals that are filed in conjunction with estate tax returns. While the overall estate return may not be audited, someone at the IRS will review all major asset appraisals. Our appraisal office has developed estate appraisal report templates specifically intended to facilitate the use of the report by the estate trustee, family members, and the IRS. Our office also provides detailed portfolio summaries and can assist in making recommendations regarding the overall portfolio management based on current and projected market conditions.
Chandos Pacific Appraisal has been preparing estate appraisals for individual commercial properties and commercial real estate portfolios for over twenty years. Depending on the ownership arrangement of the real estate, discounts may apply to the market value of the real estate. If the ownership interest is divided, a marketability discount may apply, because selling a share of real estate ownership is significantly more difficult than marketing the full ownership position of the property.
Many times when a family member dies rent rolls, expense statements, and copies of leases may all be difficult to locate. The family is at a loss with how to prepare the paper work for the IRS, and delays filing the return. Estate appraisers are accustomed to having to base values on income and expense proformas (Estimating income and expenses is common. However, appraisers are required to disclose this and the lack of actual financial statements in the scope of appraisal section and the transmittal letter and explain how they derived their estimates).
Experienced estate appraisers are mindful that although the appraisal may have been ordered for purposes of estate, it becomes a reference document to the family. Having a complete record on hand that provides a summary of all leases, expiration dates, and renewal options can assist the family with long-term planning for their property. Estate reports include information on market trends, floor plans, zoning rights, risk of flood, plat map, and tax assessment records for the property. The information provided in estate appraisals is typically very useful for the designated trustee of the estate and serves as protection to justify decisions made about the estate. Our appraisal office is pleased to be able to say that the IRS has never questioned an estate appraisal or marketability discount filed by our practice.