Do we need an appraisal when we inherit a house?
Answered by Chris Deutsch, Founder & Editor
Licensed Minnesota Realtor #20382264 ·
The short answer
Get a date-of-death appraisal. One number does two jobs: it's the basis for dividing the estate fairly, and it's the stepped-up basis the IRS uses when the house eventually sells.
On stage The 60-second answer
Captions on · Transcript below
The stage is set.
Chris's video answer is on its way. Until then, the short answer above says the same thing.
The transcript posts with the video.
The longer answer
Both jobs punish a sloppy number. Value the house too low and the heirs inherit phantom capital gains — tax on growth that happened before they ever owned it. Lean on a website's estimate and you've got nothing defensible for the siblings or the auditor. A licensed appraiser can value the home as of the date of death even if you order the work months later — that's routine. And if the house sells soon after, the sale price itself becomes strong evidence of value. Keep every page of this paper trail. Your CPA and attorney will both want it; I'm neither, and this isn't tax or legal advice.
I keep a short list of appraisers who do estate work well and gently. Ask, and I'll connect you this week.
The next department over
What people in this spot usually ask next.
- Inheritance & probateWill we owe capital gains tax when we sell our parents' house?Read the answer
- Inheritance & probateCan we sell the house before probate is finished in Minnesota?Read the answer
- Inheritance & probateMom's house still has a mortgage. What happens to it now?Read the answer
- Inheritance & probateEqualizing inheritance when one sibling keeps the homeRead the answer
- Divorce & separationWho gets the house in a Minnesota divorce?Read the answer
- Divorce & separationWe're not married, but we own the house together and we're splitting up. What happens?Read the answer
From the editor's desk
“As Founder and Editor, I review, correct, and stand behind every answer.”
Is your situation more specific than the market? That's the one worth talking through.