Preserve Your Hard Earned Estate
Walter Duke + Partners works closely with your team to make sure your estate is in order and all business and commercial real estate valuations are fully supported and defensible to put you in the best position to preserve your hard earned estate.
Estate planning is often overlooked and misunderstood. Walter Duke + Partners works closely with your legal and accounting team to make sure that your estate is in order and that all business and commercial real estate valuations are fully supported and defensible putting you in the best position to preserve your hard earned estate. Whether valuing privately held business interests (stock, partnership units, etc.) to support values claimed on estate or gift tax returns or working with your team to provide professional support in the unfortunate event of an IRS audit Walter Duke + Partners will provide rock sold valuations that will stand up against intense scrutiny. We also regularly assist our attorney clients by providing them with strictly a “value” point of view that can be used among other things as a benchmark of value for your assets so that subsequent appraisals will illustrate the growth (or loss) in value.
We Understand IRS Regulations
New IRS Tax Return Regulations (26 CFR part 1) requires taxpayers to obtain a “qualified appraisal” on real property by a “qualified appraiser” as per IRC Section 170(f)(11)(E)(iii)(ii). The IRS has defined the appraisal standards that must be met along with verifiable minimum education, has earned an appraisal designation from a recognized organization, and/or have equivalent experience in valuing the type of property being appraised. The appraiser must have experience with IRS Real Property Valuation Guidelines. Treasury Regulation Section 20.2031-1(b) requires the appraiser to follow the valuation guide lines when preparing a real estate appraisal for tax purposes or retrospective appraisal. Moreover, the appraiser should hold a designation and be qualified as stated under regulations Section 1.170A-17(a). Additionally, information that should be stated in the appraisal is set forth in Rev. Proc. 66-69, 1966 C.B. 1257. For example, utilizing the correct definition of “Market Value”, “Use Value”, “Fair Market Value”, “Intrinsic Value”, or “Investment Value” means the difference between a disputed appraisal and one that is prepared correctly.
Any opinion of value (appraisal) prepared by a certified or licensed commercial real estate appraiser for use in planning an estate and in documents filed with the revenue authorities, should be well supported by a detailed report as to how the appraiser arrived at his conclusions. Such a report should demonstrate to the user that the appraisal is well founded, substantiated, and meets with Treasury Regulations and state agency requirements. It is also wise to avoid submitting an appraisal that is more than two years old and one that does not meet other specific IRS guide lines. Additionally, the IRS looks at the accreditation of the appraiser, the rationale of the “Fair Market Value” opinion, the validity of the comparable research, and the overall professionalism of the appraisal report.
Establishing Basis for Estate Planning Purposes
If the property was acquired from a decedent the basis is typically the fair market value on the date of the decedent’s death (I.R.C. § 1014). According to Code Section 2032 an alternative valuation date may be chosen by the executor that is six months after the date of death, and typically, only if a tax savings can be shown by your tax preparer, accountant or real estate attorney. That would mean that in a declining real estate market, a beneficiary could settle his or her taxes based on a property value that is significantly higher than the current market.
Retrospective Commercial Valuations
Often, the date of death (effective date of the appraisal) differs from the date of the inspection and the date of the appraisal report. As designated experienced real estate appraisers we are familiar with the procedures and requirements necessary to perform residential or commercial appraisals that match the retrospective effective date of value.
Because multiple listing services and many commercial real estate data base services often purge data after 3 or 4 years. Therefore, if an effective date of an appraisal is over 3 years the appraiser must be aware of other commercial data sources and how to utilize those data sources to obtain verifiable comparable sales information. Walter Duke + Partners maintains a very deep data base that spans three decades. This allows us to provide the proper historical framework for retrospective valuations.
Taxpayers may be liable for additional penalties if the valuation does not adhere to IRS Real Property Valuation Guidelines. Penalties can range from approximately 20% to 40%. In preparing an appraisal for estate tax return filing purposes the IRS requires the appraiser to follow IRS Real Property Valuation Guidelines and specific appraisal guidelines. In addition, it is also important to provide a well-documented commercial appraisal with the appropriate valuation techniques, especially if fractional interest & blockage discounts or other interests are involved. In some cases, this could mean the difference of whether or not the respondent is required to pay additional estate tax. Moreover, if the estate tax is later challenged in a court of law, the experts at Walter Duke + Partners are qualified to testify as an expert witness on your behalf.
Reviewing the Appraisers Credentials
Estate valuations prepared by the professionals at Walter Duke + Partners are either personally prepared by or supervised by a Member of the Appraisal Institute which are known as being among the highest quality appraisals in the industry. As Appraisal Institute Members the professionals at Walter Duke + Partners hold the highest industry appraisal designations and have the necessary real estate educational background and years of appraisal experience needed to properly complete complex commercial appraisal assignments.
Attorneys, accountants, financial planners, executors and others rely on Walter Duke + Partners for retrospective real estate valuations and trust appraisal services because we have over 150 combined years of real estate experience and training in preparing residential and commercial appraisal reports. Utilizing the correct definition of “Market Value” or “Fair Market Value” is just one of the many IRS guide lines that we follow in preparing valuations for estate planning and tax purposes.
Real estate isn’t like publicly traded stock or other items which fluctuate in value daily. You need a professional designated commercial real estate appraiser to determine “Fair Market Value”, who is bound by the Uniform Standards of Professional Appraisal Practice (USPAP) for a high degree of confidentiality and professionalism. Additionally, you need the kind of quality report and work product IRS and taxing authorities, courts, and real estate attorneys want and expect.
Four Decades In The Making
Deeply rooted in the Florida market, Walter Duke + Partners provides innovative solutions and sound market advice.
We’re routinely ranked alongside the finest national firms and proud to help our clients, including people just like you, make highly informed critical decisions.