Other articles of interest and
additional information can be
found on the home page.
Federal Estate Tax Appraisals
Until Congress passes a repeal, federal estate tax applies to the transfer of property at death. The decedent's estate is liable for tax on the entire taxable estate, including all property, real and personal, tangible and intangible. We are often called on to prepare the inventory and valuation of the tangible personal property in estates.
The value of the decedent's property for estate tax purposes is the fair market value on the date of death, or an alternate valuation date that is six months after the date of death. The alternate date election is allowed if it decreases the value of the gross estate and the net estate tax liability. The purpose of this election is to provide tax relief for estates that experience a decline in value shortly after death.
The executor of the estate must file a federal estate tax return if the value of the gross estate at the date of death exceeds the allowed unified credit exception (currently $675,000). The value of the estate is reported on Schedule F-Other Miscellaneous Property on Form 706 (U.S. Estate and Generation Skipping Transfer Tax Return). If the value of the estate is less than the threshold, the estate may still file Form 706 to establish a new basis for the property and/or to start the clock on the three-year statue of limitations for the IRS to challenge the estate.
Appraisers of personal property must follow certain guidelines when preparing an appraisal for estate taxes. On IRS Form 706, Schedule F, the first question asked is "Did the decedent at the time of death own any articles of artistic or collectible value in excess of $3,000 or any collections whose artistic or collectible value combined at date of death exceed $10,000? If 'Yes', submit full details on this schedule and attach appraisals."
These appraisals are governed by Treasury Regulation Section 20.2031-6. The general rules stress:
A room-by-room itemization of household and personal effects is desirable.
All articles should be specifically named. However, items in the same room, each of which is valued individually at $100 or less, may be grouped.
If the decedent owned articles with artistic or intrinsic value (such as jewelry, furs, silverware, paintings, etchings, engravings, antiques, books, statuary, vases, oriental rugs, coin or stamp collections), with a total value in excess of $3,000, then a qualified appraisal is required. {Note: This conflicts with the instructions of Form 706 Schedule F. The Form requires an appraisal if one article is valued in excess of $3,000 and the Treasury Regulation requires an appraisal if the total value of artistic or intrinsic articles exceeds $3,000.}
Books in sets by standard authors should be listed in separate groups.
For paintings having artistic value, list the size, subject, and artist's name.
For oriental rugs, list the size, make, and general condition.
Groups or individual pieces of silverware should be weighed and reported in Troy ounces.
Treasury Regulation Section 20.2031-1(b) also provides the definition of fair market value used in estate tax appraisals: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate. Thus, in the case of an item of property includible in the decedent's gross estate, which is generally obtained by the public in the retail market, the fair market value of such an item of property is the price at which the item or a comparable item would be sold at retail."
Section 3 of Revenue Procedure 65-19 addresses the issue of items commonly sold at auction or through classified ads:
"Where there is a bona fide sale of tangible personal property as the result of an advertisement in the classified section of a newspaper and the property is of the type often sold by owners by such means, or there is a bona fide sale of an item of tangible personal property at a public auction, the price for which it sold will be presumed to be the retail sales price of the item at the time of sale."
For estate tax purposes, if the decedent's property is sold at public auction or through classified ads, the resulting prices realized are acceptable as fair market values, providing the sale is completed within a reasonable time and assuming that no dramatic change in the market occurs between the effective date of the appraisal and the date of sale.
For additional information on estate tax appraisals, or appraisals for non-tax charitable contribution, divorce, insurance coverage, damage claim settlement, division of an estate by the heirs, or confirmation of purchase price, please call the office.
Baltimore Auctions, Baltimore Auctioneers, Auctioneers, Auctions, Real Estate Auctions, Real Estate Auctioneers, Real Estate, Harford County Auctioneers, Harford County, Maryland Auctions, Maryland Auctioneers, Auction Houses, Antiques, Appraisals, Harford County Appraisers, Commercial Auctions, Commercial Auctioneers, Residential Auctioneers, Real Property Auctions, Baltimore Waterfront Auctioneers, Waterfront Auctioneers, Cecil County Auctioneers, Cecil County Auctions, Waterfront Auctions, Maryland Land, Maryland Real Estate, National Auctions, National Auctioneers, Local Auctioneers, Local Auctions, Baltimore City Auctions, Baltimore City Auctioneers, Real Estate Message Board, Auction Message Board, Forclosure Auctions, Mobile Homes, Mobile Home Auctions, Contract Auctioneers, Contract Auctions, Auction Brokers, Real Estate Auctions in Maryland, Auctions, New York, New Jersey, Delaware Auctions, Washington DC Auctions, Eastern Shore Auctions, Auction Estate Representatives, Pennsylvania auctions, Baltimore, Real Estate, Baltimore, Auctions, Baltimore, Auctioneers, Baltimore, Maryland Auctions, Baltimore, Auction Houses, Baltimore Antiques, Aberdeen Real Estate, Havre De Grace Real Estate, Churchville Real Estate, Belcamp Real Estate, Abingdon Real Estate, Perryville Real Estate, Northeast Real Estate, Bel Air Real Estate, Aberdeen Homes, Aberdeen Properties, Aberdeen Realtor, Aberdeen Real Estate Agent, Aberdeen, Havre De Grace, Churchville, Belcamp, Abingdon, Perryville, Northeast, Bel Air, Harford County, real estate sales, buyer broker, buyers agent, Real Estate, multiple listing service, condo, condo conversion, townhouse, 1031 tax exchange, prequalification, mortgage loans, home locator, investment homes, investment properties, relocation specialist, residential, real, estate, residential real estate, houses, homes, Real Estate, estate homes, fine homes, multi-million dollar estate homes, multi-million dollar estates, foreclosure, reo, repo, bank repo, short sales, fixer, property, Realtor, Realtors, for sale, sale, buy, buyers, condominiums, townhomes, single family residence, view homes, duplex, duplexes, split levels, ranch style homes, single story homes, two story homes, RV access, pool homes, golf course view, ocean view, city lights view, nice neighborhood, Elkton Real Estate, Aberdeen Real Estate, Rising Sun Real Estate, Chesapeake City Real Estate, Perryville Real Estate, Conowingo Real Estate, Port Deposit Real Estate, Cecilton Real Estate, Aberdeen Proving Grounds (APG) Real Estate, Abingdon Real Estate, Gunpowder Real Estate, Bel Air Real Estate, Belcamp Real Estate, Churchville Real Estate, Darlington Real Estate, Forrest Hill Real Estate, Havre de Grace Real Estate, Jarrettsville Real Estate, Elkton Homes, Elkton Properties, Elkton Realtor, Elkton Real Estate Agent, Elkton, Aberdeen, Rising Sun, Chesapeake City, Perryville, Conowingo, Port Deposit, Cecilton, Aberdeen Proving Grounds (APG), Abingdon, Gunpowder, Bel Air, Belcamp, Churchville, Darlington, Forrest Hill, Havre de Grace, Jarrettsville, Cecil and Harford County, real estate sales, buyer broker, buyers agent, Real Estate, multiple listing service, condo, condo conversion, townhouse, 1031 tax exchange, prequalification, mortgage loans, home locator, investment homes, investment properties, relocation specialist, residential, real, estate, residential real estate, houses, homes, Real Estate, estate homes, fine homes, multi-million dollar estate homes, multi-million dollar estates, foreclosure, reo, repo, bank repo, short sales, fixer, property, Realtor, Realtors, for sale, sale, buy, buyers, condominiums, townhomes, single family residence, view homes, duplex, duplexes, split levels, ranch style homes, single story homes, two story homes, RV access, pool homes, golf course view, ocean view, city lights view, nice neighborhood, Specializing in Real Estate, Real Estate, Harford County, Baltimore County, Cecil County, Baltimore City, Real Estate, harford county homes for sale, harford county home sellers, harford county home buyers, Harford county real estate, Long and Foster Harford County, Harford County Long and Foster, Long and Foster, Realtors in Harford County, Real Estate Agent harford County, long and foster baltimore county, long and foster cecil county, buyer broker, buyer agent, Real Estate, Bel Air real estate, condo, MLS, townhouse, Realtors, mortgage loans, home locator, relocation specialist, residential, real, estate, residential real estate, houses, homes, Real Estate, abingdon maryland, Bel Air Homes, Joppa homes, edgewood homes, belcamp homes, multi-million dollar estate homes, foreclosure, property, maryland homes for sale, home buyers, Maryland real estate, townhomes, single family residence, split levels, ranch style homes, single story homes, Aberdeen Real estate, Bel Air Real estate, Abingdon maryland Real estateHarford County, Baltimore County, Cecil County, Realtors, real estate agents, real estate, buying real estate, selling real estate, harford realtors, baltimore realtors, cecil realtors, brokers, maryland agents, relocations, brac, relocating to maryland, harford agents, baltimore agents, harford county real estate agents, houses for sale, condominiums for sale, buying houses, selling houses, waterfront property, commercial property, residential property, listing real estate, buying real estate, fallston, abingdon, havre de grace, aberdeen, joppa, jarrettsville, whiteford, elkton, pylesville, parkville, towson, real estate team, bel air, locating real estate, real estate wanted, harford auctioneers, baltimore auctioneers, cecil auctioneers, maryland auctioneers