RETROSPECTIVE APPRAISALS

The effective date of a retrospective appraisal is in the past (historical). The value opinion reflects what existed not what exists (although they can be the same). The data is before the appraiser’s visit to the property.

The purpose of a retrospective appraisal is to establish a credible market value opinion at a particular prior point in time. During a retrospective appraisal the appraiser must collect information, as of the historical effective date, about:

(1) the subject property to understand its legal and physical condition, and

(2) the market in which it would have competed.

this is necessary research and part of the process to provide a credible opinion of value.

Mr. Levi has performed numerous retrospective appraisals.

ESTATE APPRAISALS

During the estate and tax planning process, one of the key concerns of clients is to minimizing the tax burden on the heirs of an estate. This can be a complex issue and can involve a CPA and/or tax attorney. One part of the strategy is a retrospective appraisal of the real estate (single-family residence, commercial, land, etc.) in the estate.

The appraisal is usually done after the owner passes away and therefor it is often called a date of death appraisal – the effective appraisal date being in the past.

For estate planning it is important the property has a credible valuation for tax purposes. If not credibly valued the estate may be subject to additional taxes. Under current tax law a credible market value opinion will help the estate establish a baseline value that will help determine capital gains taxes when they sell the property.

A retrospective estate appraisal can also help avoid litigation and disputes among heirs. Having a credible market value opinion assists the estate planner in their process of treating all heirs fairly so that there is no confusion or disagreement about the value of a property.

Fractional Interests: Estates sometimes can involve “factional” interests. This is where each heir has an undivided portion or fractional interest (e.g. she inherits 80% and he inherits 20% of a property). These types of situations are more complex because each party has lost control and marketability of the property. The value of each fraction can involve a discount (be less) than its portion of the 100% undivided fee simple interest in the property. Mr. Levi has expertise in performing these types of appraisals.

Mr. Levi has performed numerous retrospective appraisals for both estate and legal situations.