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Georgia Heirs & CPAs: 2026 IRS Step-Up Rules Are Stricter — Don’t File Estate Taxes Without This Appraisal

Don’t Let the IRS Question Your Step-Up: How to Get the Right Date of Death Appraisal the First Time

In 2026, IRS scrutiny around estate tax filings is up — especially in Georgia, where property values surged and step-up basis claims are under the microscope.

We’ve seen heirs and CPAs risk major penalties (or worse, audit flags) because they used the wrong home value — or submitted a CMA instead of a licensed retrospective appraisal.

If you’re handling an estate, managing Form 706/1041, or advising a client on capital gains exposure, here’s what you need to know now — before tax season hits full swing.

Most heirs don’t realize this, but the IRS doesn’t just accept a home’s value — they scrutinize it. Especially when there’s a step-up in basis involved and a significant estate tax implication on the line.

We recently worked with a client in the Atlanta metro whose accountant was about to report the property value using the sales price — months after the owner passed.

That would’ve cost the estate over $27,000 in additional capital gains taxes.

Why? Because the sales price wasn’t the fair market value on the date of death — and that’s what the IRS legally requires.

Let’s break down what you need to know so you don’t make the same mistake.

The 3 Things the IRS Is Really Looking For in a Date of Death Appraisal

1. A Retrospective “Effective Date”

The appraisal must state the home’s value as of the date your loved one passed — not the listing date, the sale date, or the date you file taxes.

If your report doesn’t clearly reflect a retrospective effective date, the IRS may reject it or kick it back for clarification — delaying your estate distribution or filing.

2. A USPAP-Compliant, Licensed Appraisal — Not a CMA or Estimate

IRS examiners don’t accept:

  • Real estate agent CMAs

  • Zestimate screenshots

  • Online calculator tools

  • “Verbal estimates” from friends or agents

They want a licensed, written appraisal with market comps, adjustments, and defensible methodology.

3. A Report That Can Be Understood By the IRS (Not Just You)

It’s not enough for you to know what your home is worth. The IRS auditor — who’s never seen your home — needs to understand:

  • Why it was valued the way it was

  • How the comps were chosen

  • Whether the condition of the home was factored in

  • Why any adjustments were made

A licensed appraiser will explain this in a narrative format that passes scrutiny — and protects your numbers.

Common IRS Mistakes We See Heirs Make

  • Submitting a sales price instead of a date-of-death FMV

  • Using an estimate from a realtor (even a good one)

  • Not getting an appraisal until after the estate is already filed

  • Forgetting to factor in condition (like damage or repairs needed at death)

  • Not documenting the appraiser’s license and compliance

How We Help You Get It Right the First Time

At REI Valuations, we specialize in IRS-compliant Date of Death Appraisals designed to protect estates, avoid IRS kickbacks, and support step-up in basis filings with confidence.

When you order from us, you get:

BONUS: Mention this blog and get a free upgrade to 3-day priority delivery ($75 value)

Limited Appraisal Slots Available This Week

We only take on a limited number of date of death appraisals per week to ensure turnaround and quality.

📌 If you need an appraisal for IRS filing or step-up in basis, don’t delay.
Click below to request yours now and avoid costly delays or tax errors.

👉 Request Your Date of Death Appraisal Now

January 5 2026 1:05pm

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