inherited house

TP inherited property, but did not get an appraisal on date of death. What I have done in the past is to use the tax value when there was no appraisal. This TP has also done about 13k in renovations to get the house sell able. Can I add those to the tax value? Since there was no appraisal, I am thinking negative.

The local property appraisers value is not really based on that particular house, but really a large selection of houses, but, it’s all you have, and yes, I would also use the repairs

The assessed value found on the tax rolls is pretty much worthless for establishing FMV. You authoritatively establish value by hiring a licensed real estate appraiser to figure it out. Ideally that is done close to the date of death. It can be done later, though it's more work for the appraiser. Yeah, you will have to pay him $400 or $500 but that's how you get it right.

Upon audit, IRS will not challenge a licensed appraiser. A SWAG from the taxpayer or his preparer worn't fly.

And yes, add improvements. And closing costs.

I would never go with the tax roll value. It has little if any relationship to market value. For example, if it were in CA, for two "identical" houses on the same block, one bough in 1999 and another in 2019, the assessed value could be $40k versus $2M.

Maria U. Ku, CPA
Oakland, CA

That may be the case in Cali, but, in some states, the assessors valuation is close enough. Bell, what state are you in?

in some states, the assessors valuation is close enough.

For future reference what are some of the states where the assessor's valuation accurately keeps up with FMV?

I can only speak to Oklahoma. Oklahoma County, while not 100% accurate, gets you in the ball park on their valuations.

My anecdotal observation in Ohio. Auditors tax valuations for lower value houses are too high, and too low for higher value houses. Another way the less affluent get screwed. There have been many well researched newspaper articles on this over the years but nothing changes. I hope the tax authorities are not reading this but I would never sell my home for less than 1.5x what the auditor says it is worth.

Did the "inherited house" pass through the Estate?
Was the house subjected to "estate tax".
Could fall under the exemption, or could not.
Some homes by-pass the Estate where the names on the deed are simply transferred.
If the latter, no "step up in basis".
The house must qualify for the step up in basis.

Some homes by-pass the Estate where the names on the deed are simply transferred.. Sounds good. How does that work, exactly?