QPRT Appraisals in NY & CT: Valuing a Home for a Qualified Personal Residence Trust Gift (Form 709)

A Qualified Personal Residence Trust (QPRT) lets a homeowner transfer a residence to an irrevocable trust while keeping the right to live there for a fixed term. Because the trust is set up during life, the transfer is a taxable gift that is generally reported on IRS Form 709. The reported gift is not the full house value. Counsel and the CPA subtract the grantor’s retained term interest. But every part of that calculation starts with one number: the fair market value of the residence as of the date it was transferred to the trust.

This briefing is for trusts-and-estates attorneys, CPAs, and wealth advisors setting up QPRTs for homes in Westchester County, Manhattan, and Greenwich/Fairfield County. It explains what the appraiser provides (and what the appraiser does not), how the report supports Form 709 "adequate disclosure," how co-ops, second homes, and fractional interests are handled, what to send the appraiser, and when a later appraisal may be needed. For the broader gift-appraisal picture, see gift appraisals for Form 709. This post covers the QPRT-specific parts.

In a QPRT, the appraiser supplies one input: the fair market value of the residence on the transfer date. The retained-interest discount, the 7520 rate, and the taxable gift figure are the attorney’s and CPA’s work. A clean QPRT file keeps those two jobs separate and clearly labeled.

Why a QPRT Gift Needs a Qualified Appraisal

When a residence goes into a QPRT, the remainder interest (what the beneficiaries get when the term ends) is a completed gift on the transfer date. Its value is derived from the residence’s fair market value. If that starting value is wrong, every number downstream is wrong too: the remainder gift, the use of the grantor’s lifetime exemption, and any later comparison the IRS makes.

A broker opinion, an online estimate, or an assessed value is weak support for a gift return. A private, USPAP-compliant appraisal by a credentialed residential appraiser, with an effective date matching the transfer date, gives counsel a documented value that can be attached to Form 709 and defended if questioned. Related: what the IRS expects from a gift-tax appraisal and when a gift of NY real estate needs a formal appraisal.

Who Does What: Appraiser vs. Attorney vs. CPA

QPRT files run more smoothly when everyone knows where their job ends.

• The appraiser gives an opinion of the fair market value of the residence (land and improvements) as of the transfer date, under USPAP, with the intended use (gift tax reporting for a QPRT transfer) and intended users (the grantor, counsel, the CPA, the trustee) named in the report.
• The attorney drafts the trust, chooses the term, handles the deed and any co-op board or lender consents, and decides the legal transfer date.
• The attorney, CPA, or an actuary calculates the value of the grantor’s retained interest and the taxable remainder gift using the IRS Section 7520 rate for the transfer month and the IRS actuarial tables. That calculation, and any advice on term length, reversion, or lease-back after the term, is their job, not the appraiser’s.

Madison & Park does not give tax or legal advice. The report delivers a supported real-estate value. Counsel and the CPA turn that value into the gift figure.

Effective Date: Value the House on the Transfer Date

The appraisal’s effective date should match the date the residence is actually transferred to the trust, usually the date the deed (or, for a co-op, the stock and lease assignment) is signed and delivered. Counsel should confirm that date in the engagement letter.

• Before the transfer: some attorneys order the appraisal shortly before funding so the gift math is ready at signing. If the effective date and the deed date are far apart, ask whether the value should be updated or the effective date set to the transfer date.
• After the transfer: if the trust was funded first, the appraisal is a retrospective assignment valued as of the transfer date, using sales and market conditions available as of that date. See retrospective appraisals for a past date.

Whole Fee Simple vs. Fractional Interests

Many QPRT plans transfer the entire residence. Others split ownership: for example, spouses who own a home jointly may each transfer their undivided share into a separate QPRT, as counsel sees fit.

Unless the engagement letter says otherwise, a residential appraisal values the 100% fee simple interest in the property. Any discount for owning a fractional or partial interest (lack of control, lack of marketability) is a separate analysis with its own support, and it is not built into a standard residential report. If the plan depends on a fractional-interest discount, counsel should say so up front so the scope can be set correctly, or engage a specialist for that piece. The report should state clearly which interest is being valued.

Second Homes and Vacation Properties

QPRTs are not limited to a primary residence. Under the IRS regulations, a personal residence can include the grantor’s principal residence or one other residence used as a residence, such as a weekend house in northern Westchester or a waterfront home in Greenwich or Fairfield County. Counsel decides whether a specific property qualifies. The appraisal process is the same: market value of the property as of the transfer date.

Second homes often bring their own valuation questions: waterfront frontage and docks, acreage, guest cottages, seasonal use, and thinner comparable sales. For waterfront and larger Greenwich properties, see waterfront valuation in Greenwich and appraising backcountry Greenwich estates.

Manhattan and Westchester Co-ops: Valuation vs. Legal Issues

A co-op is shares in a corporation plus a proprietary lease, not a deed to real property. Whether a co-op can go into a QPRT, and on what terms, depends on the trust documents, the building’s proprietary lease, and board consent. Those are attorney issues, and they should be settled before the appraisal is ordered.

On the valuation side, a co-op QPRT appraisal values the shares and proprietary lease attributable to the unit, using sales in the same and comparable buildings. It considers maintenance, any assessments, financing limits, sublet rules, and flip taxes as the market reacts to them. Condos are valued as real property with common charges and building factors in the analysis. Related: Manhattan co-op vs. condo appraisals and Manhattan co-op estate appraisals.

Form 709 Adequate Disclosure and the Appraisal

Why does report quality matter so much on a gift return? Under Treas. Reg. §301.6501(c)-1(f), the IRS’s period to assess gift tax generally starts running only if the gift is adequately disclosed on the return. A gift that is not adequately disclosed can stay open to IRS review well beyond the usual three years. Counsel and the CPA decide how to meet the rule. At a high level, one accepted route is to attach an appraisal by a qualified appraiser that includes, among other things:

• The date of the transfer, the date of the appraisal, and the purpose of the appraisal
• A description of the property
• A description of the appraisal process used
• The assumptions, hypothetical conditions, and limiting conditions
• The information considered, such as comparable sales
• The appraisal procedures followed and the reasoning behind the value
• The valuation method used and the specific basis for the value, such as the specific comparable sales relied on

The regulation also describes who counts as a qualified appraiser: someone who holds themselves out to the public as an appraiser or performs appraisals regularly, is qualified to appraise that type of property, and is not the donor, the donee, a relative of either, or their employee. A full USPAP appraisal report written for this intended use is designed to cover these points. Whether a given return meets every disclosure requirement is the preparer’s call.

What Attorneys Should Send the Appraiser

Timeline

Most QPRT appraisals follow a simple sequence: engagement letter and documents, an interior and exterior inspection, research and analysis, then the written report. Standard residential reports are usually delivered within a few business days of the inspection. Large estates, waterfront homes, co-ops that need building data, and retrospective effective dates can take longer. If the deed signing is already scheduled, tell the appraiser the date when you order so the report is ready for the gift calculation.

At the End of the Term, or If the Grantor Dies During It

A QPRT appraisal is not always the last appraisal the property needs. Counsel and the CPA will advise on the tax treatment, but common situations include:

• Grantor survives the term: the residence passes to the remainder beneficiaries or a continuing trust under the trust terms. If the grantor stays in the home, counsel may arrange a lease at fair market rent, and a market-rent opinion can support that rent. Basis questions for beneficiaries are for the CPA, but the original transfer-date appraisal is an important record to keep with the trust file.
• Grantor dies during the term: the residence (or part of it) is generally pulled back into the grantor’s taxable estate. In that case a date-of-death appraisal is typically needed for the estate return and basis, separate from the original QPRT report. See Westchester estate appraisals, Greenwich estate appraisals, and step-up in basis for high-net-worth estates.

Keeping the original appraisal, its workfile reference, and the deed date together makes any later valuation faster and easier to reconcile.

Frequently Asked Questions

Does the appraiser calculate the QPRT gift amount?

No. The appraiser provides the fair market value of the residence as of the transfer date. The attorney, CPA, or actuary calculates the retained interest and the taxable remainder gift using the Section 7520 rate and IRS tables.

What effective date should a QPRT appraisal use?

The date the residence is transferred to the trust, as confirmed by counsel. If the appraisal is done after the transfer, it is a retrospective appraisal as of that date.

Can a vacation home or second home go into a QPRT?

The regulations allow a personal residence to include one residence other than the principal residence, so second homes are often used. Counsel decides whether a specific property qualifies. The appraisal approach is the same.

Can a Manhattan co-op be appraised for a QPRT?

Yes, the shares and proprietary lease can be valued like any co-op. Whether the co-op can be transferred to the trust, including board consent and lease terms, is a legal question for counsel.

Will the appraisal include a fractional-interest discount?

Not by default. A standard residential appraisal values the 100% fee simple interest. A fractional-interest discount is a separate analysis that must be defined in the engagement, or handled by a specialist.

Is an appraisal needed again when the QPRT term ends?

Sometimes. A market-rent opinion may be useful if the grantor will lease the home back. If the grantor dies during the term, a date-of-death appraisal is typically needed. Counsel and the CPA will advise on what the file requires.

How Madison & Park Handles QPRT Appraisals

Madison & Park Appraisal provides private, USPAP-compliant residential appraisals for gift, trust, and estate planning across Westchester County, Manhattan, and Greenwich/Fairfield County. Dave Lister, SRA (Appraisal Institute), is a NY Certified Residential Appraiser. For Connecticut properties: Licensed in Connecticut · SRA · USPAP/date-of-death experience.

QPRT reports are written for counsel and the CPA: the effective date matches the transfer date, the interest being valued is stated plainly, comparable sales and reasoning are laid out in detail, and the report avoids tax conclusions that belong to the preparer. To order a QPRT appraisal, call (914) 413-3800 or use our contact form. Attorneys can also start at For Attorneys or Private Appraisal.

Final Thoughts

A QPRT gift is only as solid as the value it starts from. Set the effective date to the transfer date, define the interest being valued, settle co-op and eligibility questions with counsel first, and get a qualified appraisal detailed enough to support adequate disclosure on Form 709. The attorney and CPA handle the 7520 math. The appraiser’s job is to make sure the house value underneath it holds up.

Hero photo: Greenwich Harbor, Greenwich, CT, by Carol M. Highsmith (Library of Congress, public domain via Wikimedia Commons); cropped and resized.

← Back to Insights