The IRS requires Real Estate appraisals in many instances such as estate filings, inheritance, gifts, and even real estate donations. The State of Oregon Department of Revenue has rules for real property as well which will require appraisals.
All Aces Appraisals understands your needs and the requirements needed for you to comply with your mandatory duties when it comes to taxes and real estate. However, we are not tax professionals or accountants. We can provide the appraisal you need for your reporting requirements, but it would not be wise to ask us for tax or financial advice.
The below information was deemed to be accurate at time of posting, however it should not be used as tax advice and should be independently verified.
Appraisals for IRS – Estate Taxes on Real Property
In 2021, estates with a total value of over $11,700,000 require an IRS estate tax return (Form 706) and all real estate in the estate will need valuation. If you are an executor or administrator of an estate – you have been entrusted to carry out the wishes of the deceased’s estate plan as swiftly and exactly as possible. You will need to hire a licensed and certified appraiser to appraise each piece of real estate within the prescribed time. If the properties will be sold and the proceeds divided amongst the heirs – you will also need an accurate snapshot of the valuation of those properties at time of death – the IRS has another form (8939) you’ll also need to file.
Oregon Estate Taxes on Real Property (State)
In the State of Oregon, estates valued at over $1 million are taxed. This is in addition to any IRS estate taxes owed. The Oregon Estate Tax Rules are straight forward. The executor, administrator, or a fiduciary of the estate is required to file under Oregon Law when real property is involved. A certified appraisal will be needed to prove the value under $1 million for exemption, or if over $1 million an appraisal will be needed to determine the tax owed. Once the appraisal is completed, the amount will be listed on the Oregon Estate Transfer Tax Return form (Form OR-706)
Real Property Gifts (IRS)
If you want to gift a real estate to one or more of your offspring while you are still living, this could trigger an IRS taxable event. The value of that property at the time of the gift will need to be duly noted, and you will need a certified appraisal, proving its value. Taxes are required on gifts of more than $15,000 in one calendar year.
Donated Real Property (IRS)
If you are going to gift or donate property to a non-profit, or give real property to a government agency to set aside for a park or open space you will need to have an appraisal (snap-shot of the property’s value at the time of transfer). You will need to fill out the IRS Form 8283 section B, which you must attach to your tax return and have signed by a certified and licensed appraiser once a qualified appraisal is completed on the donated or gifted real estate – not more than 60-days prior to transfer. IRS Document 561, page 10 explains the stipulated information.
The estate tax laws and real estate taxation rules can be confusing. Adam Bogle knows it’s his responsibility to get you the property valuation figures you need so you can fulfill your requirements under the IRS Federal Tax Code, and the State of Oregon Department of Revenue rules. Nathan has the experience, knowledge, and insight to get it done right, and he’ll complete your appraisal on a timely basis so you meet your mandatory tax reporting obligations.