One question, asked about a day in the past
What was the property worth on the day the owner died? Everything else on this page follows from that, including the mistakes.
The answer does two separate jobs. It supports whatever return the estate has to file, and it fixes the cost basis each heir carries forward. The second one outlives the first by decades: a beneficiary who sells in fifteen years and has no supported date-of-death figure in the file is arguing with the Internal Revenue Service about a number nobody wrote down at the time.
Get the date right before you engage anyone
This is the expensive mistake, and it is nearly always made before an appraiser is involved.
A report is built around its effective date. The sales it relies on, the market conditions it describes and the reasoning that connects them all belong to that date. You cannot take a report written to today and point it at last March afterwards — the whole analysis would have to be redone, which means paying twice.
So settle it first. In almost every estate the answer is the date of death. Where the accountant is weighing the alternate valuation date six months later, tell me at the start: that election is narrower than people assume, it cannot be reversed once made, and pricing it properly means two analyses rather than one.
New Jersey’s inheritance tax is the reason this comes up so often
Two taxes get confused here constantly, so it is worth separating them.
New Jersey repealed its estate tax for deaths on or after 1 January 2018. It did not repeal the inheritance tax, which is still in force and which works on a principle most people find surprising: it depends on who inherits, not on how much the estate is worth.
- Class A — spouse, civil union or domestic partner, child, stepchild, grandchild, parent, grandparent. Pays nothing.
- Class C — the deceased’s siblings, and a child’s spouse or widow. First $25,000 exempt, then 11% to 16%.
- Class D — everyone else, including nieces, nephews and friends. 15% to 16%.
The practical consequence for a county like Passaic is that a perfectly ordinary two-family left to a nephew produces a New Jersey tax bill on an estate far too small to trouble the federal government. That is why more of this work happens here than the size of the estates would suggest.
New Jersey’s return falls due eight months from the date of death. A federal Form 706, where one is needed at all, comes due at nine. Both are worth working backwards from.
When the property is already gone
Often the house has been sold, cleared or renovated before anybody thinks about the appraisal. That is normal and it does not stop the work.
What changes is the evidence available. I use what is documented — listing photographs, an inspection report, the tax record, your own recollection — and the report says openly that it assumes the property stood in that condition on the effective date. That is an extraordinary assumption and it is named as one rather than glossed over. A report that quietly implies I inspected a kitchen that had already been ripped out is worth less than a report that admits what it could not see.
If the estate did sell the house, the sale is analysed as evidence. It is not automatically the answer. An arm’s-length sale on the open market a few months after the death is usually strong; a quiet sale to a family member, or a fast one to clear the estate, is exactly the kind of transaction a reviewer looks at twice.
What you receive
A written report with the date of death as its effective date, carried by sales that closed around that date rather than in today’s market, with every adjustment explained and a signed USPAP certification.
It goes to the executor or administrator. It goes onward to counsel or the accountant when you tell me in writing to send it, and not otherwise.
New Jersey specifics
- New Jersey's estate tax ended for deaths from 1 January 2018. It did not stop charging inheritance tax, and the two get confused constantly.
- Inheritance tax turns on who inherits, not on how much. Class A — spouse, civil union or domestic partner, child, stepchild, grandchild, parent, grandparent — pays nothing at all.
- Class C, meaning siblings of the deceased and a child's spouse or widow, takes the first $25,000 free and then pays 11% to 16%. Class D — everyone else, including nieces, nephews and friends — pays 15% to 16%.
- New Jersey's return falls due eight months from the date of death. Federal Form 706, where one is required at all, is due at nine.
- A modest house in Paterson or Clifton left to a nephew can generate New Jersey tax on an estate far too small to interest the federal government. That is why this work comes up here more often than people expect.
What you receive
- A report whose effective date is the date of death
- A conclusion carried by sales that closed near that date, not near today
- Any extraordinary assumption or hypothetical condition named openly
- A certification signed under USPAP
- Delivery to the executor, and onward to counsel or the accountant on written instruction
What I need from you
- The date of death
- The address, and the block and lot if an assessment notice is to hand
- Who is executor or administrator, and who is authorised to receive the report
- Access to inspect — or word that the property has been sold, cleared or altered
- Anything you know about its condition as it stood on the date of death