Estate Valuation


At the end of 2012 taxpayers and practitioners were scrambling to complete estate plans to shift wealth to next of kin. The major concerns were the expected changes in 2013:

  1. The estate tax rate might increase.
  2. The large exemption (in excess of $10 million per family) would be drastically reduced.

Well, neither of the above happened. Thus, the first half of 2013 for many practitioners was spent completing the plans and valuations. Our firm was very consumed with the business and real estate appraisals and discount studies. This type of work continued in the latter half of 2013 and 2014, just not at the same frenetic pace of late 2012 and early 2013.

Today, our valuation planning studies are primarily conducted for estates with about $15 million in value and higher (IRS Form 709). Death tax valuations (IRS Form 706) can include much smaller estates, as well as much larger ones. In addition, for first-to-die estate tax returns, the valuations are particularly germane. The assets are "stepped up" to market value. Upon sale, the new market value is the cost basis used to measure the extent of the gain subject to tax. Once the real estate is stepped up, the property can be "re-depreciated" by the recipient (designated beneficiary owner and taxpayer) as if acquired. For these situations, our cost segregation services often produce significant tax savings in the first 7 years of "new ownership."

If the estate owns a real property valued at more than $1 million, call us to see if a cost segregation is beneficial.