For estate attorneys, managing tax filings for a deceased client's property is a high-stakes process. The IRS is notoriously strict when it comes to valuations, and a poorly documented appraisal can trigger audits, penalties, or costly delays for the heirs.
One of the most critical aspects of IRS estate reporting is ensuring that the valuation is performed by a "Qualified Appraiser" and that the final document is a "Qualified Appraisal." Not every licensed appraiser meets these federal standards. In fact, many standard mortgage appraisers lack the specific designations and experience required by the IRS.
What is a Qualified Appraiser?
The IRS definitions, detailed in Section 170(f)(11)(E) of the Internal Revenue Code, state that a qualified appraiser is an individual who:
- Has earned an appraisal designation from a recognized professional appraiser organization (such as the Appraisal Institute's SRA designation).
- Has verifiable education and experience in valuing the specific type of property being appraised.
- Regularly performs appraisals for compensation.
- Demonstrates verifiable, specialized knowledge.
If the appraiser does not meet these criteria, the IRS can reject the appraisal, regardless of how thorough the report may seem.
What is a Qualified Appraisal?
Beyond the appraiser's qualifications, the report itself must adhere to specific IRS guidelines. A Qualified Appraisal must include:
- A detailed description of the property.
- The physical condition of the property at the time of the valuation.
- The exact date(s) of valuation (often retrospective to the date of death or the alternate valuation date).
- The specific terms of any agreement related to the property.
- A statement that the appraisal was prepared for income tax purposes.
- The qualifications of the appraiser.
Why Attorneys Rely on Madison & Park
At Madison & Park Appraisal, we specialize in high-end Westchester properties and complex estate valuations. Dave Lister holds the SRA designation from the Appraisal Institute, directly satisfying the IRS's highest standard for a qualified appraiser. We produce court-ready, IRS-compliant reports that protect both the estate and the legal team representing it.
If you're an estate attorney representing a property in Westchester County, contact us to ensure your valuation meets the strict IRS threshold.