A few reasons why you may want to have a Fair Market Valuation on a property:
Estate Settlement
When a loved one passes away and leaves behind real estate property, the Fair Market Valuation is used to determine the property’s value at the time of the individual’s death. This valuation is essential for estate settlement, as it establishes the basis for calculating estate taxes, inheritance taxes, and the distribution of assets to beneficiaries.
Capital Gains Tax
If the inherited property is eventually sold, the Fair Market Valuation at the date of death can help calculate capital gains tax. By establishing a stepped-up basis to the property’s current market value, the heirs can potentially reduce their tax liability when selling the property.
Property Insurance
Accurate valuation ensures that the property is adequately insured. Knowing the true value of the property helps in securing an appropriate insurance policy to protect against potential losses due to events like fire, theft, or natural disasters.
Equitable Distribution
In cases where multiple heirs are involved, the Fair Market Valuation helps ensure the equitable distribution of assets. Knowing the exact value of the property prevents disputes among beneficiaries and ensures each party receives their rightful share.
Financial Planning
Heirs often use the Fair Market Valuation to make informed financial decisions. Whether they decide to keep, sell, or rent the property, having an accurate assessment of its value is critical for effective financial planning.
Probate and Legal Compliance
Many jurisdictions require an accurate date of death appraisal for probate proceedings. A valid valuation is necessary to meet legal compliance and satisfy court requirements.
Real Estate Market Insight
The Fair Market Valuation provides insight into the property’s current market value, allowing heirs to make informed decisions about its future. This knowledge can help them decide whether to sell immediately, hold onto the property, or invest in improvements.
Minimize Tax Liability
By establishing a stepped-up basis at the “Date of Death”, heirs can potentially reduce capital gains taxes when selling the property. This can lead to significant savings over time.
Call Mark Darfler for a FREE Fair Market Valuation on your house.