09/16/2021
“Major Assets Have Not Been Professionally Appraised
Heirs are taxed on the value of the estate they've inherited. The total estate is calculated by adding up the values of all the individual assets, including investments, housing, land, businesses, cars, collectibles and personal effects.
Although the value of some items is relatively easy to assess, other asset values are dependent on changing conditions. For example, a stock has a definitive value on a specific date, but raw land can be relatively worthless for a long time, then suddenly become very valuable when a new development is announced. A business can have a higher value during the owner's life than after his or her death. On the other hand, an oil painting may skyrocket in value upon the artist's demise.
All of these factors are important because the IRS will establish a value for an estate at the time of death. In the absence of a previously established value, the IRS may impose its own valuation at a substantially higher number, increasing the amount of taxes due.
Business opportunity. Bring in a professional appraiser to assess the current value of key assets.
The IRS will accept a qualified appraisal, which is a document prepared by a qualified appraiser in accordance with generally accepted appraisal standards. Additionally, in the case of a business, an appraiser can not only determine a valuation for present day, but can do so using a formula that can be readily updated over time. Both are critical to minimizing taxes and maximizing the distribution of assets.”
Connecting clients with a network of professionals can help them sidestep common pitfalls.
