When someone passes away, managing their estate can feel overwhelming. One key process—often overlooked but crucial—is the Date of Death (DOD) appraisal. Whether you’re an heir, executor, or estate planner, understanding this specialized property valuation can make a big difference in taxes, inheritance, and even family harmony.

If you’re navigating the estate process and need a qualified appraiser, visit Tyke Appraisal’s Estate Date of Death Appraisal Services. Their expert services ensure that your valuation complies with IRS guidelines and protects your financial interests.

Let’s break down what a DOD appraisal is, why it matters, and how it impacts property valuation in estates.

What Is a Date of Death Appraisal?

A Date of Death appraisal is a professional assessment of a property’s market value as of the date the property owner passed away. Unlike a current market appraisal, it reflects the value at a fixed point in the past. This is especially important for:

• Estate settlement

• Tax reporting

• Distributing assets among heirs

Why Is It Required?

The IRS mandates a “fair market value” be established for all real property within an estate. This valuation impacts estate taxes, capital gains calculations, and equitable distribution. Executors must provide this value in estate tax returns, making an accurate appraisal essential.

How DOD Appraisals Affect Property Valuation in Estates

1. Estate Tax Calculation

The primary reason for a DOD appraisal is tax reporting. The IRS uses the value of the estate as of the decedent’s death to determine any federal estate taxes owed.

🔍 Example: If a property was worth $800,000 on the owner’s date of death, but is worth $1 million a year later, the estate tax is based on the $800,000 value.

2. Step-Up in Basis for Capital Gains

When heirs inherit property, they often receive a “step-up” in cost basis. This means the asset’s value is adjusted to its DOD appraised value, reducing future capital gains if the property is sold.

Real-World Example:

Sarah inherits her father’s home.

• His original purchase price: $250,000

• Date of death appraised value: $700,000

• Sale price a year later: $720,000

Capital gain = $20,000, not $470,000, thanks to the step-up in basis.

3. Equitable Asset Distribution

In estates with multiple beneficiaries, accurate valuations help divide assets fairly. Real estate often represents the most valuable part of an estate, so an impartial, professional DOD appraisal ensures no party is unfairly enriched or shortchanged.

Who Needs a Date of Death Appraisal?

You likely need one if you’re:

• An executor or administrator of an estate

• An attorney handling an estate settlement

• An heir receiving real property

• A financial advisor or accountant assisting with estate planning

• Selling or transferring inherited real estate

DOD appraisals are commonly requested for homes, condos, land, multi-family properties, and even commercial real estate.

What Does a DOD Appraisal Include?

A date of death appraisal must follow Uniform Standards of Professional Appraisal Practice (USPAP) and typically includes:

• Physical description of the property

• Market data from the relevant time

• Comparable sales as close as possible to the DOD

• Photographs (from archives if current ones don’t match the condition)

• Neighborhood analysis

• Final market value as of the date of death

📌 Note: The closer the appraisal is performed to the actual DOD, the easier it is to gather historical sales data and document the property condition.

Common Challenges and How to Overcome Them

1. Delayed Appraisals

It’s not uncommon for estates to wait months—or even years—before getting an appraisal. This can make it difficult to locate comparable sales or determine the original property condition.

Tip: Hire an experienced appraiser with access to historical MLS data and aerial imagery archives.

2. Disagreements Among Heirs

Disputes often arise when heirs believe a property is undervalued or overvalued. A third-party appraisal provides objective, unbiased documentation that can resolve conflicts.

3. Estate Size and Tax Thresholds

As of 2025, estates exceeding $13.61 million are subject to federal estate tax. Knowing your DOD property value helps determine if the estate crosses that threshold.

How to Choose the Right Appraiser

Not all appraisers specialize in estate or DOD valuations. When hiring, look for:

• Certified Residential Appraiser credentials

• Experience with estate appraisals

• Knowledge of IRS guidelines

• Access to historical sales and property data

• Local market expertise

For reliable service in the Chicago area, consider Tyke Appraisal. Their team is trained in DOD valuations and adheres to IRS-compliant standards.

Tips for Executors and Heirs

• Document Everything: Keep records of property condition, ownership, and appraisals.

• Act Early: Don’t delay—early appraisals are more accurate and less stressful.

• Consult Professionals: Work with estate attorneys and CPAs to understand tax implications.

• Don’t Rely on Online Estimates: Zillow or Redfin estimates don’t meet IRS requirements.

The IRS and the 6-Month Alternative Valuation

In some cases, the estate representative may opt for the “Alternate Valuation Date”, which is six months after the date of death. This can be beneficial if property values fall in a declining market.

Conditions:

• The alternate valuation must lower the estate’s value and taxes.

• Applies to all estate assets, not selectively.

• Must be elected on IRS Form 706.

This strategy can offer significant tax savings in volatile markets.

Conclusion: Why Date of Death Appraisals Matter

Date of death appraisals are far more than a bureaucratic requirement—they’re foundational to estate administration, tax planning, and fair asset distribution. Whether you’re navigating probate or planning your estate, getting a professional, IRS-compliant DOD appraisal is a smart move.

Still unsure if you need a DOD appraisal? Explore your options with Tyke Appraisal’s Estate Services.

Have you had experience managing an estate? What challenges did you face with property valuation? Share your story or questions below—we’d love to hear from you!