What date does the appraisal use?

The day the gift was actually made — the date the deed was delivered and accepted, not the day it was recorded if those differ, and not the day the return is filed. Get that date from whoever is handling the transfer rather than estimating it. Like every retrospective assignment on this site, the date cannot be changed afterwards without redoing the analysis.

What makes a disclosure adequate?

The regulations set out what the return and the supporting appraisal must contain — who the appraiser is and why they are qualified, the property, the valuation date, the method, the basis, and enough detail for the position to be understood. When the disclosure is adequate, the period for the IRS to revalue the gift runs and eventually closes. When it is not, that window can stay open. This is precisely the part your accountant cares about, and it is worth them seeing the report.

We are giving the children a share, not the whole house.

Then two separate questions arise and I only answer one of them. I can value the real property. Whether a fractional or minority interest in it carries a discount for lack of control or marketability is a valuation-of-an-interest question, usually handled by a business valuation specialist, and it is not work I take. Your accountant will know whether the transfer needs both.

Does New Jersey tax the gift?

New Jersey has no gift tax of its own. What it does have is the transfer inheritance tax, and a gift made within three years of death can be treated as made in contemplation of death and pulled back into the taxable estate. That is a live issue where a parent transfers property to a non-Class A beneficiary late in life, and it is a question for counsel rather than for me — but it is worth knowing the appraisal may matter twice.

Gift and Donation Appraisals in New Jersey

Q: Is a donation appraisal different from a gift appraisal?

The valuation work is much the same; the paperwork around it is not. A charitable donation above the threshold generally needs a qualified appraisal and an appraiser declaration on Form 8283, signed by the appraiser and acknowledged by the donee organisation. There are also timing rules about how close to the donation the appraisal must be. Tell me which one this is at the outset, because the form requirements differ.

Dated to the day the property changed hands

Not today. Not the day the return is filed. The day the gift was actually made — which is when the deed was delivered and accepted, and which is not always the day it was recorded.

Get that date from whoever handled the transfer rather than estimating it. As with every retrospective assignment on this site, it cannot be changed afterwards without redoing the analysis, and it is the single mistake here that costs the whole fee.

What the report has to contain, and why

This is the part that makes a gift appraisal different from an ordinary one.

When a gift is reported with adequate disclosure, the period during which the IRS may revalue it runs and eventually closes. When the disclosure falls short, that window can stay open — which is the opposite of what the whole exercise was for.

The regulations are specific about what a supporting appraisal must include: who the appraiser is and why they are qualified to value this property, a description of the property, the valuation date, the method used, and the basis for it, set out in enough detail that somebody can follow the reasoning rather than take it on faith.

So these reports say more about the appraiser and the method than a lender’s report ever would. That is deliberate, and your accountant should see the report before the return goes in.

A donation is a different form

Same valuation work, different paperwork, and the difference is worth catching at the start.

A noncash charitable contribution above the threshold generally needs a qualified appraisal by a qualified appraiser, with an appraiser declaration on Form 8283 — signed by the appraiser and acknowledged by the receiving organisation. There are also rules about how close to the donation date the appraisal has to be.

Tell me which of the two this is when you call. The analysis is similar; the requirements around it are not, and discovering the difference at filing is too late.

The one I do not do

If you are transferring a fractional share rather than the whole property, there are two questions and I answer only the first.

I can value the real property. Whether a minority or fractional interest in it carries a discount for lack of control or lack of marketability is a valuation-of-an-interest question — usually a business valuation specialist’s work — and it is not something I take on.

Your accountant will know whether the transfer needs both. Better to hear that now than to find the report answers half the question.

New Jersey’s part in it

There is no New Jersey gift tax. There is the transfer inheritance tax, and it can reach backwards.

A gift made within three years of death may be treated as made in contemplation of death and pulled into the taxable estate. That matters most where a parent transfers property late in life to somebody outside Class A — a sibling, a niece, a friend — since those are the beneficiaries New Jersey actually taxes.

It is counsel’s question rather than mine. What it means practically is that the appraisal you commission for the gift may end up doing work twice, which is a good reason to have it done properly the first time.

New Jersey specifics

A gift of New Jersey real property to a non-spouse commonly interacts with the State's transfer inheritance tax if the donor dies within three years, where a transfer made in contemplation of death may be pulled back into the taxable estate.
Property transferred between family members frequently never reaches the open market, so there is no sale to point at and the appraisal is the only evidence of value that exists.
Where a parent transfers a house but continues living in it, that is a fact the return and the valuation both have to deal with honestly, and it is a question for counsel before it is a question for an appraiser.

What you receive

A report whose effective date is the date of the transfer
A statement of the appraiser's qualifications, as the regulations require
The valuation method and the basis for it, set out rather than asserted
Comparable sales from around the transfer date
Signed USPAP certification

What I need from you

The exact date of the transfer, and the recorded deed where there is one
What interest was transferred, and to whom
Whether an accountant or attorney is directing the filing
Access to inspect, or documentation of condition at the transfer date

Call about a gift & charitable donation appraisal

Most of this is quicker said than written. Give me the address, what the appraisal has to do, and the date you are working to — a fee and an inspection date come back on the call rather than in a form response two days later.

Worth mentioning: The date the value has to speak to, and who fixed it — counsel, a statute, or an assumption somebody made. It is the one decision here that cannot be repaired afterwards.

Valuing gifted or donated New Jersey property