Inherited a House in Arizona? Why the Date-of-Death Value Matters

If you’ve inherited a house in Phoenix or anywhere in Maricopa County, one number will follow that property for years: its market value on the date the owner died. That value can affect how much tax is owed when the home is eventually sold, how an estate is divided, and what goes on the probate inventory. A date-of-death appraisal is how that number gets documented.

This article explains what the date-of-death value is, why heirs and executors usually need it in writing, and what to expect from a retrospective residential real estate appraisal. It isn’t tax or legal advice; your CPA and attorney decide how the value is used.

What “date-of-death value” means

The date-of-death value is the market value of the home as of the day the owner passed away, not today’s value and not the price the owner paid. An appraiser estimates what the property would most likely have sold for on that date, based on its condition at the time and sales of similar homes around that date.

Because the date is in the past, this is called a retrospective appraisal. Appraisers are allowed to set an effective date earlier than the date they write the report, as long as they explain how they did it.

Why it matters when you sell an inherited home

Under federal tax rules, the cost basis of property you inherit is generally its fair market value at the date of death, often called a “stepped-up basis” (Internal Revenue Code section 1014). In plain terms:

• If Mom bought the house decades ago for a fraction of today’s price, the heirs’ starting point is usually the date-of-death value, not her original purchase price.
• When the heirs sell, the gain is typically measured from that date-of-death value.
• A higher, well-supported date-of-death value can mean a smaller taxable gain. A guess or an online estimate gives the IRS little reason to accept it.

Some estates can elect an alternate valuation date six months after death (section 2032). That’s a decision for your CPA or estate attorney; the appraisal can be prepared for whichever date they ask for.

Ask your CPA how the value will be used for your situation. Our job is to give them a credible, supportable number.

Why not use Zillow, a tax assessment or an agent’s opinion?

Executors often ask whether a free estimate is “good enough.” For tax and court purposes it usually isn’t:

• Online estimates are computer models of today’s value, not the value on a past date, and they don’t see the home’s actual condition.
• The county’s full cash value is set for property tax purposes and often lags or misses the market.
• A broker’s price opinion or CMA is a sales tool, not an independent appraisal, and isn’t prepared under appraisal standards.

A retrospective appraisal by a state-certified appraiser is independent, follows the Uniform Standards of Professional Appraisal Practice (USPAP), and explains its comparable sales and reasoning in writing. That’s what CPAs, attorneys and probate courts expect to see.

What the appraiser needs from you

You’ll get the best result if you can share:

• The date of death (the effective date of the appraisal).
• The property’s condition at that time: photos, an old listing, repair invoices, or simply what you remember about updates, damage or deferred maintenance.
• Any changes since then: if the family has cleaned out, repaired or remodeled the home, the appraiser needs to know so the report reflects the home as it was, not as it is now.
• Who the report is for: the executor, the trustee, the heirs, the attorney or the CPA.

If the home has already been sold, a retrospective appraisal can still be done. The appraiser relies on records, photos and the market data from around the date of death.

How a date-of-death appraisal works

1. Order online or by phone, and tell us the address, the date of death and who the report is for.
2. Inspection: in most cases the appraiser visits the home to measure it and note its features. If the home was changed or sold, we discuss what records to use instead.
3. Research: the appraiser studies sales of similar homes that closed around the date of death, not today’s sales.
4. Report: you receive a written residential appraisal with the effective date, the comparable sales, the adjustments and the reasoning, ready for your CPA, attorney or the court.

Timing: sooner is easier

There’s no rule that the appraisal must be done in the first week, but it’s easier while the home still looks the way it did on the date of death and while memories and records are fresh. In probate, the personal representative usually has to list estate assets and their values, so the appraisal often comes early in the process. Your attorney can tell you the deadlines that apply to you.

Common questions

Can you appraise a home as of a date several years ago? Yes. Retrospective appraisals can go back years if there’s enough market data and information about the home’s condition at that time.

Do all the heirs need to agree on the appraiser? Not legally, in most cases, but an independent appraisal that everyone trusts helps avoid disputes. The executor or trustee usually orders it.

Does the appraisal have to be in person? Usually yes, when the home still exists in a similar condition. If it has been sold or heavily changed, we’ll explain the options.

Do you do date-of-death appraisals outside Phoenix? Yes. We appraise homes throughout Maricopa County, Arizona, including the West Valley and Sun City areas.

Get the date-of-death value documented

West Valley Appraisal Services prepares date-of-death and retrospective residential real estate appraisals for executors, trustees, heirs, attorneys and CPAs throughout Phoenix / Maricopa County, Arizona.

Learn more about date-of-death appraisals or call (602) 717-8450 to order.

Written by Jason Clow, State Certified Residential Appraiser #21559. This article is general information, not tax or legal advice.