IRS Estate & Gifting Appraisals in California

Yes. When real estate is transferred and the value exceeds reporting thresholds, IRS Tax Form 709 requires documented Fair Market Value as of the transfer date. A qualified appraisal by a qualified appraiser provides the necessary, defensible support for the reported value. This is a key step in avoiding issues with gift taxes.

Fair Market Value for gift tax purposes is the price at which property would change hands between a willing buyer and a willing seller, neither under compulsion to buy or sell, and both reasonably informed of all relevant facts. Crucially, this value must reflect the market conditions on the exact date of the transfer. This standard is central to any IRS gift tax property appraisal.

Yes. If the Internal Revenue Service determines that the reported value on a tax return is unsupported or materially understated, it may question the filing. A defensible, qualified, state license certified general appraiser will significantly reduces this risk, providing robust documentation to support your reported fair market value and prevent potential issues with gift tax liability.

Most standard gifting appraisals for real estate assignments are completed within 5–10 business days, depending on the property's complexity and market data availability. Larger or more complex commercial properties may require additional analysis time. This timeframe is critical for ensuring your gift tax return is filed by its deadline.

Yes. A Date of Death appraisal is a specific type of valuation used to determine the fair market value of a property on the exact date a property owner passed away. This value is often required for estate settlement, probate, and tax reporting.

An IRS Estate & Gift appraisal is a broader category used to comply with federal tax reporting requirements. These appraisals are typically required when property is transferred through an estate or given as a gift during someone’s lifetime.

In many cases, a Date of Death appraisal is part of an IRS estate appraisal, because the IRS requires the property’s value as of the date the owner passed away for estate tax purposes.

However, gift appraisals are different, because the property must be valued on the date the gift is transferred, not the date of death.

In simple terms:

• Date of Death Appraisal: Determines a property's value on the date an owner passed away.

• IRS Estate Appraisal: Often uses the date of death value for estate tax reporting.

• IRS Gift Appraisal: Determines the value of property transferred as a gift during the owner’s lifetime.

A qualified appraisal ensures the valuation meets IRS documentation requirements and can be relied upon for tax reporting or legal purposes.

A “qualified appraisal” must be prepared by a qualified appraiser, clearly identify the correct valuation date, include detailed analytical support for the conclusion, and comply with recognized professional standards such as USPAP. Engaging a Certified General Appraiser in California helps ensure the report meets the depth and compliance requirements appropriate for IRS appraisal.

Not necessarily. Filing IRS Tax Form 709 does not automatically create gift tax liability. Many transfers are covered by the annual exclusion or the substantial lifetime exemption. However, the fair market value of the gifted real estate must still be accurately reported on IRS Tax Form 709 to properly track cumulative taxable gift amounts and ensure compliance with Internal Revenue law.

If the Internal Revenue Service determines that a property was materially undervalued on a gift tax return, it may adjust the reported amount. This can affect lifetime exemption calculations and potentially increase future estate tax exposure or create a gift tax liability. A defensible, qualified appraisal reduces this risk and supports consistent tax reporting across multiple filings, safeguarding against potential penalties and interest.

The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

The infrastructure to allow electronic filing of gift tax returns is currently under development. Until electronic filing of gift tax returns is available, continue to file paper returns per the form's instructions. Additional information will be provided as available.

Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

1. Gifts that are not more than the annual exclusion for the calendar year.
2. Tuition or medical expenses you pay for someone (the educational and medical exclusions).
3. Gifts to your spouse.
4. Gifts to a political organization for its use.

In addition to this, gifts to qualifying charities are deductible from the value of the gift(s) made.

Making a gift or leaving your estate to your heirs does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions). If you are not sure whether the gift tax or the estate tax applies to your situation, refer to Publication 559, Survivors, Executors, and Administrators.

Refer to Form 709 [PDF, 709 Instructions and Publication 559. Among other items listed:

1. Copies of appraisals.
2. Copies of relevant documents regarding the transfer.
3. Documentation of any unusual items shown on the return

(partially-gifted assets, other items relevant to the transfer(s)).

1. File another Form 709
2. Enter "Supplemental Information" across the top of page 1 of the form
3. Include a statement of what has changed, along with the supporting information
4. Attach a copy of the original Form 709 that has already been filed

For the mailing address for a supplemental Form 709, see Filing Estate and Gift Tax Returns.

The Internal Revenue Service cannot make recommendations about

specific individuals, but there are several factors to consider:

1. How complex is the transfer?
2. How large is the transfer?
3. Do I need an attorney, CPA, Enrolled Agent (EA) or other professional(s)?

For most simple, small transfers (less than the annual exclusion amount) you may not need the services of a professional.

However, if the transfer is large or complicated or both, then these actions should be considered; It is a good idea to discuss the matter with several attorneys and CPAs or EAs. Ask about how much experience they have had and ask for referrals. This process should be similar to locating a good physician. Locate other individuals that have had similar experiences and ask for recommendations. Finally, after the individual(s) are employed and begin to work on transfer matters, make sure the lines of communication remain open so that there are no surprises.

Finally, people who make gifts as a part of their overall estate and financial plan often engage the services of both attorneys and CPAs, EAs and other professionals. The attorney usually handles wills, trusts and transfer documents that are involved and reviews the impact of documents on the gift tax return and overall plan. The CPA or EA often handles the actual return preparation and some representation of the donor in matters with the IRS. However, some attorneys handle all of the work. CPAs or EAs may also handle most of the work, but cannot take care of wills, trusts, deeds and other matters where a law license is required. In addition, other professionals (such as appraisers, surveyors, financial advisors and others) may need to be engaged during this time

You do not have to be present during an examination unless IRS representatives need to ask specific questions. Although you may represent yourself during an examination, most donors prefer that the professional(s) they have employed handle this phase of the examination. You may delegate authority for this by executing Form 2848 "Power of Attorney."

You have many rights and avenues of appeal if you disagree with any proposals made by the IRS. See Publication 1 and Publication 5 [PDF for an explanation of these options.

The general rule is that your basis in the property is the same as the basis of the donor. For example, if you were given stock that the donor had purchased for $10 per share (and that was his/her basis), and you later sold it for $100 per share, you would pay income tax on a gain of $90 per share. (Note: The rules are different for property acquired from an estate).

Most information for this page came from the Internal Revenue Code: Chapter 12-Gift Tax (generally Internal Revenue Code $2501 and following, related regulations and other sources)

For federal tax purposes, the terms "spouse," "husband," and "wife" includes individuals of the same sex who were lawfully married under the laws of a state whose laws authorize the marriage of two individuals of the same sex and who remain married. Also, the Service will recognize a marriage of individuals of the same sex that was validly created under the laws of the state of celebration even if the married couple resides in a state that does not recognize the validity of same-sex marriages.

However, the terms "spouse," "husband and wife," "husband," and "wife" do not include individuals (whether of the opposite sex or the same sex) who have entered into a registered domestic partnership, civil union, or other similar formal relationship recognized under state law that is not denominated as a marriage under the laws of that state, and the term "marriage" does not include such formal relationships.

Gifts to your spouse are eligible for the marital deduction.

For further information, including the timeframes regarding filing claims or amended returns, see Revenue Ruling 2013-17.

Revenue Ruling 2013-17 PDF, along with updated Frequently Asked Questions for same-sex couples and updated FAQs for registered domestic partners and individuals in civil unions, are available today on IRS.gov. See also Publication 555, Community Property.

The IRS will provide an account transcript for gift tax returns when Form 4506-T, Request for Transcript of Tax Return, is properly completed and submitted with substantiation. The transcript may be requested via fax or by mail using Form 4506-T. Upon receipt and verification (including matching current taxpayer and taxpayer representative records with the information on the submitted Form 4506-T), a hardcopy transcript will be mailed to the address of record. Incomplete or unsubstantiated requests will be rejected, and a Notice will be sent to the Requester. No fees apply.

Form 4506-T, Request for Transcript of Return, and instructions [PDF are available on IRS.gov. Form 4506-T has multiple uses and special attention must be taken when completing the form for a gift tax inquiry. Complete the form using the printed instructions paying close attention to the following:

Lines 1a and 1b: Enter the Donor's information including an SSN.

Lines 2a and 2b: Leave blank.

Line 3: Enter Donor's current address if living; estate representative's name, title and address if donor is deceased. The address provided must match the official IRS record.

Line 4: Leave blank.

Line 6: Enter "Form 709,"

Line 6 a-c: The ONLY option available for gift tax is 6b. DO NOT make any other selections in items 6-8.

Line 9: Enter the tax period (MMDDYYYY). If the tax period is unknown, refer to the "Written Requests" section below.

Line for Attestation Clause: The requester must read and agree to the attestation clause on Form 4506-T. This box must be checked to have Form 4506-T processed.

Signature/Title Requirements: The Requester must be authorized to receive the information. If the taxpayer listed on Line 1 is the Requester, no further documentation is necessary. If the Requester is other than the taxpayer shown in Line 1, the Title portion of the signature section must be completed and substantiated; see Documentation below.

Documentation: Please note that in every situation, the individual making the request for information must be authenticated.

1. If a Personal Representative/Executor/Executrix is signing the information request, then, Letters Testamentary, Letters of General Administration or another similar document from the Court must be provided with the request for information. Enter either "Personal Representative" or "Executor" or "Executrix" in the Title section.
2. If there is no probate and a surviving spouse is requesting the data, then a statement that no probate will be commenced, and a copy of a marriage certificate or other similar document is necessary to be provided with the request for information. Enter "Spouse" in the Title section.
3. If there is no probate and the estate is administered under the control of a Trustee, then a statement that no probate will be commenced and a Certificate of Trust or a copy of the complete Trust Instrument must be provided with the request for information. Enter "Trustee of the Trust" in the Title section.
4. If a Trust Officer signs the request for information, the Bank and/or Trust Company must substantiate its authorization to receive taxpayer information, including identification the specific Trust Officer. Enter "Trust Officer" in the Title section.
5. If a tax professional signs the request for information, provide a copy of the initial Form 2848 submitted to the IRS for the same taxpayer and the same tax year. A new Power of Attorney is not enough; the record must be established on CAF prior to sending the request for information. For additional information, refer to the "A Note about Form 2848, Power of Attorney" section below. Enter "Power of Attorney" in the Title section.

General Tip: Altered forms will not be accepted. This includes white out, pen and ink changes, or type overs of any kind.

The instructions for Form 4506-T provides a chart directing where to mail or fax the request based upon the state in which the taxpayer was domiciled. Choose the RAIVS Team in either Ogden, UT or Cincinnati, OH.

Written Requests

It is also acceptable to send a written request to the IRS to secure a gift tax transcript. This method should be reserved for taxpayer's that do not have record of which tax year(s) a gift tax return was filed. The written request must include language requesting a determination of "All Gift Tax Returns Filed" for the taxpayer. Use the same fax number or mailing address provided in the Form 4506-T Instructions. The requester must be substantiated with documentation as outlined above for a request using Form 4506-T. Unsubstantiated requests will be rejected.

A Note about Form 2848, Power of Attorney

Please be advised that a duplicate, incomplete, and/or unsubstantiated Form 2848 can result in a rejection of information requests. These tips are provided to reduce the potential for rejection of Form 4506-T.

• File only one official Form 2848, Power of Attorney PDF in accordance with the most current instructions for each taxpayer. Use the same spelling and address for the taxpayer on all future correspondence.
• Send one complete original with substantiation to the CAF Unit as indicated on the instructions for Form 2848. This is the only way the Form 2848 is recorded.
• For subsequent correspondence with the IRS for the same taxpayer, provide a copy of the official Form 2848. Do not make any alterations; do not provide an original signature; simply label it as a "Copy." The official filing will be electronically verified by IRS based on the data originally filed with the CAF Unit.
• Do not send a Form 2848 with future correspondence that has not been sent to the CAF Unit for processing. Note that signature dates and other items from the official Form 2848 are recorded and will be verified against any new data requests.
• To update the CAF with a tax professional's address or telephone number, do not submit a new Form 2848. Instead, send written notification that includes the new information and the representative's signature to the location where the original Form 2848 was filed.
• The CAF system is only updated with documents received at the CAF Unit.
• Although not mandatory, it may be beneficial to check "Other acts authorized" at Line 5a and write in "Request and Receive IRS Transcripts."

To make payment by paper check, make the check payable to "United States Treasury." Note the decedent's name, social security number, and "Form 706" on the face of the check. Mail the check to:

Internal Revenue Service
1973 Rulon White Blvd.
Ogden, UT 84201