Every few months an executor calls our firm after their CPA has already told them the estate is well under the federal exemption. No estate tax return. No Form 706. And they ask a reasonable question: if nobody owes estate tax, why pay for a date of death appraisal?
Here is the honest answer, and it is the single most expensive misunderstanding in estate settlement.
The estate tax is not the reason you need the appraisal. The reason is what happens to the heirs three, five, or ten years later, when they sell the house.
For deaths occurring in 2026, the federal estate and gift tax exemption is $15 million per individual — $30 million for a married couple using portability. The One Big Beautiful Bill Act made that amount permanent, indexed for inflation beginning in 2027. Above the exemption, the federal rate is 40%.
Virginia has no state estate tax and no inheritance tax.
So for the overwhelming majority of families settling an estate in Fairfax County, Vienna, Burke, Springfield, Annandale, Centreville, or Clifton, there is no federal estate tax and no Virginia estate tax. The CPA is right. No Form 706 is required.
And the appraisal is still one of the most valuable documents the estate will ever produce.
When you inherit property, your cost basis in that property is not what the decedent paid for it. Under Internal Revenue Code §1014, the basis of property acquired from a decedent is generally its fair market value as of the date of death. That reset is called the stepped-up basis.
It matters because capital gains tax is calculated on the difference between what you sell for and what your basis is. A high, well-documented basis is money in the heirs’ pockets.
Here is an illustrative example — not a client file, just arithmetic:
A parent buys a rambler in Burke in 1988 for $185,000. They live in it for thirty-eight years. They pass away in 2026, and the house is worth roughly $850,000 at the date of death. Two adult children inherit it.
That is a difference of roughly $665,000 in potentially taxable gain, on an estate that owed zero estate tax.
The stepped-up basis is a right the heirs already have. The appraisal is what makes it provable.
A note on jointly held property between spouses: Virginia is a common-law state, not a community property state, and the step-up on jointly held marital property generally applies to the decedent’s share rather than the whole. Your CPA determines the exact treatment. Our job is to give them a defensible number to work from.
Our firm is certified in Virginia, Washington DC, and Maryland, and the estate tax picture is not the same across the three:
Which means a family that owes nothing federally can still owe a five- or six-figure bill in DC or Maryland. In those jurisdictions the appraisal is not just about the heirs’ future basis — it is the number the return is built on.
None of that is tax advice, and we do not give any. The estate’s attorney and CPA determine what gets filed. We supply the supported opinion of value the filing depends on.
This is the part most people do not expect, and it is where a lot of reports fall apart.
A date of death appraisal is a retrospective appraisal. The effective date of value is the date the person died — which may have been eight months ago, or three years ago. The appraiser is not telling you what the house is worth today. He is reconstructing what it was worth on a specific date in the past, using only market data that was available as of that date.
That is a materially harder assignment than a current-value appraisal, and it is why so many retrospective reports get challenged. Common failure points:
Every adjustment in our sales comparison grid is derived using Multivariate Adaptive Regression Splines (MARS), a statistical modeling method that produces market-derived, documented support for each adjustment rather than an appraiser’s unexplained round number. When a report has to survive an IRS examination or a challenge from a beneficiary, the difference between a supported adjustment and an assumed one is the whole case.
If the estate does file a federal estate tax return, the executor may have a second option. Under IRC §2032, the executor can elect to value the gross estate as of the date six months after death instead of the date of death.
The election is narrow. It may be made only if it decreases both the value of the gross estate and the estate tax liability. It applies to all property in the gross estate — the executor cannot pick and choose. Property sold, distributed, or otherwise disposed of within that six-month window is valued as of the date of disposition. And the election is generally made on the return and is irrevocable.
Practically, this means an estate may need two retrospective values, not one. If your attorney is evaluating the §2032 election, tell us up front — the assignment is scoped differently.
An appraisal prepared for estate settlement is a legal instrument. It may be reviewed by the IRS, relied on by a probate court, or challenged by a beneficiary who does not like the number. The ones that survive share the same traits:
A Zillow estimate is not any of those things. Neither is a realtor’s CMA — a comparative market analysis is a pricing tool prepared by someone whose compensation depends on the listing. It is not an independent appraisal, and it was never built to be defended.
Date of death and estate appraisals are $595, with a $100 surcharge for properties valued over $1 million. Turnaround is 5–7 days from inspection (subject to seasonal fluctuations).
We are DC Metro Appraisals, based in Fairfax. Certified Residential Real Estate Appraiser in Virginia, Washington DC, and Maryland — 34 years appraising, 15,000+ completed appraisals, and 600+ appraisal reviews, which means we have spent decades reading other appraisers’ reports and know exactly where they fail.
If you are an executor, a probate attorney, or an adult child trying to settle a parent’s estate and you are not sure what you need, call. The phone is answered personally.
(703) 350-2542
In most cases yes. The federal exemption determines whether estate tax is owed. It does not determine whether the heirs need documented basis. Under IRC §1014, an heir’s basis in inherited real property is generally the fair market value as of the date of death, and an appraisal is the standard documentation of that value. Without it, the heirs may face capital gains tax on appreciation that occurred during the decedent’s lifetime.
There is no fixed limit. We regularly prepare retrospective appraisals with effective dates several years in the past. What matters is the availability of market data as of that date — sales, listings, and market conditions in that specific submarket. Older effective dates take more research, not less.
No. A comparative market analysis is a pricing opinion prepared by an agent, typically one seeking the listing. It is not prepared under USPAP, it is not independent, and it is not built to be defended before the IRS or a probate court. For estate settlement, the estate needs an appraisal from a certified appraiser.
That is normal and it is handled in the appraisal. The effective date is the date of death, so the property must be valued in the condition it was in on that date — not the condition at inspection. Photographs, contractor invoices, and your own account of the property’s condition all help. Tell us about the work that was done; do not hide it.
The intended user is identified in the report and typically includes the executor or personal representative and the estate’s attorney and CPA. That matters under USPAP — an appraisal is prepared for stated intended users and a stated intended use. If the report will be relied on by the IRS, a court, or a beneficiary, tell us at intake so the assignment is scoped correctly from the start.
$595, with a $100 surcharge for properties valued over $1 million. Turnaround is 5–7 days from inspection.