IRS Step-Up Appraisals in Philadelphia, PA
Retrospective date-of-death valuations for IRS estate tax filings and stepped-up basis calculations. Protect your inheritance with proper documentation.
Frequently Asked Questions
What is a step-up in basis and why does it matter?
An inherited property's basis is generally its fair market value at the date of death, but elections and exceptions can change the result. Ask the executor or tax adviser to confirm the property's applicable basis and valuation date, and the records needed to support them. Do not assume that an appraisal by itself determines the tax due on a later sale.
How long after someone dies can I get a date-of-death appraisal?
A retrospective date-of-death appraisal may be possible years after the death, depending on the available data and assignment requirements. However, it's best to act promptly while market data is readily available and property condition can be more easily documented. We recommend getting the appraisal within the first year when possible.
What does a date-of-death appraisal cost in Philadelphia?
Confirm the scope, fee, and delivery date before ordering.
Does the IRS require a professional appraisal for stepped-up basis?
While the IRS doesn't always require an appraisal, having professional documentation is strongly recommended. Without an appraisal, you may struggle to prove the property's value if the IRS questions your basis—potentially resulting in additional taxes, penalties, and interest.
What qualifications must an appraiser have for IRS purposes?
Ask your attorney or tax adviser which appraisal and provider qualifications are required. Confirm the assigned appraiser and current credentials before ordering.
Understanding the Step-Up in Basis
An inherited property's tax basis is generally its fair market value at the date of death, but an applicable alternate valuation or another rule can change the result. Ask the executor or tax adviser to confirm the property's basis, the relevant valuation date and any exceptions before deciding which appraisal documentation is needed. A valuation report documents an opinion of value; it does not determine the tax due on a later sale.
Assume a home originally purchased for $50,000 has a fair market value of $500,000 at the owner's death and the general date-of-death basis rule applies. The heir's starting basis would be $500,000, and a later gain or loss would be measured using that basis, as adjusted, and the amount realized on the sale. Elections, exceptions and other adjustments can change the result. Ask the executor or tax adviser to confirm the applicable basis, valuation date and rules for the actual property.
Why You Need a Date-of-Death Appraisal
While informal estimates might seem sufficient initially, problems arise when the property is sold— sometimes years or even decades later. Without a contemporaneous appraisal, heirs struggle to prove what the property was worth at the date of death.
Property values in Philadelphia have changed significantly over time, making retrospective valuations increasingly difficult as years pass. Market data becomes harder to locate, comparable sales records may be incomplete, and memories of property condition fade. An appraisal performed near the date of death, or a properly researched retrospective appraisal, provides the documentation needed to support your stepped-up basis claim.
For an estate tax filing, discuss the valuation date and required documentation with your tax adviser. Confirm the proposed appraiser's qualifications and report scope before engagement. Report acceptance by the IRS is not guaranteed.
Retrospective Valuation Methodology
A retrospective appraisal addresses a stated effective date in the past. For a property in Philadelphia or Philadelphia County, confirm the requested date, available historical sales data and proposed appraiser's scope before engagement.
The retrospective approach involves researching comparable sales that occurred around the effective date, understanding market conditions at that time, and adjusting for any changes to the subject property. We document the property's condition as of the date of death through photographs, prior inspection records, estate inventories, and interviews with family members who knew the property.
Our IRS Step-Up Appraisal Services
IRS Qualified Appraiser Requirements
Confirm the assigned appraiser, current credentials, and documentation required for your intended tax use with your tax adviser before ordering.
Timing Considerations
While date-of-death appraisals can be prepared at any time, there are advantages to acting promptly. Market data is most readily available for recent dates, and property condition can be more easily documented while memories are fresh.
For an estate filing deadline, ask your tax adviser when valuation documentation is needed. Share that deadline and confirm provider availability and delivery before engagement.
Working with CPAs and Estate Attorneys
A CPA or estate attorney may identify the valuation date and intended use. Share their instructions with the proposed appraiser and confirm the required documentation before engagement.
Discuss the intended use, valuation date and reporting requirements with your tax adviser and proposed appraiser. Confirm what documentation and consultation, if any, are included in the agreed scope. Report acceptance by the IRS is not guaranteed.
Protect Your Inheritance Value
Contact us about a date-of-death appraisal request. Discuss the intended tax use, valuation date and reporting requirements with your tax adviser and proposed appraiser before engagement.
Philadelphia records for an inherited home’s tax basis
An inherited Philadelphia home can raise both a federal income-tax basis question and a Pennsylvania inheritance-tax question. The IRS inherited-property guidance says basis is generally the property’s fair market value at death, subject to applicable elections and exceptions. Ask the executor or tax adviser to identify the governing date, ownership interest and documentation before requesting a retrospective appraisal.
Pennsylvania inheritance tax has its own date rule. 72 P.S. § 9121 uses the date of death; Pennsylvania’s inheritance-tax instructions explain that there is no six-month alternate valuation date for that state tax. A federal alternate valuation election should therefore not be assumed to change the Pennsylvania inheritance-tax date. Confirm the treatment of jointly owned property with your adviser.
The Philadelphia Register of Wills keeps estate inventories and related records. The City’s Department of Records records real estate documents. Gather available deeds, estate valuation records, photographs and repair history, and mark which describe the home at death. Ask the adviser whether an existing estate valuation can support the intended basis documentation or whether the assignment needs another scope. A valuation opinion supports a property value; your tax adviser determines the applicable tax treatment.
The Pennsylvania sections on this page were written with AI assistance for Eagle Home Appraisal Philadelphia.