IRS step-up and date-of-death appraisals in Peoria, AZ
Appraisal services / IRS step-up and date-of-death appraisals
A step-up question is a question about one day in the past.
An heir's tax basis in an inherited Peoria home generally starts from what the home was worth when its owner died. A retrospective appraisal gives an opinion of that value for that day. Bring the address, the date your tax adviser has named and the reason you need the figure.
Get a date-of-death appraisal quote | Call +1-602-837-3118
What a step-up appraisal is, and why it looks backward
The IRS explains that the basis of property inherited from a decedent is generally its fair market value on the date of death, whether or not the executor files an estate tax return. If the heir later sells for more than that basis, there is a taxable gain.
The new basis is generally that value, whether it is higher or lower than what the owner paid, so "step-up" is a nickname, not a promise of a saving. The appraisal, also called a date-of-death or retrospective appraisal, is an opinion of fair market value for one property on one past date. It does not calculate tax. Your tax adviser names the date.
Arizona community property and the surviving spouse's half
Arizona is one of the nine community property states the IRS lists. IRS Publication 551 says that when either spouse dies, the whole value of the community property, including the half that already belonged to the survivor, generally becomes the basis of the entire property. The condition is that at least half the value of the community interest is includible in the deceased spouse's gross estate, and it holds whether or not the estate must file a return (26 U.S.C. § 1014(b)(6)).
The IRS illustrates it with a couple whose community property had a basis of $80,000 and a fair market value of $100,000 when one spouse died. After the death, each half carries a basis of $50,000.
For a surviving spouse in Peoria, that can mean one date-of-death appraisal supports the basis of the whole house, not half of it, if the home is community property. That turns on the facts. Under A.R.S. § 25-211, property acquired by either spouse during the marriage is community property, except property received by gift or inheritance and property acquired after a divorce petition was served, if that petition ended in a decree. Property owned before the marriage is separate (A.R.S. § 25-213). Your tax adviser or attorney decides which applies. An appraisal does not.
Date, condition, evidence: what a current price leaves out
Which date? Usually the date of death. The alternate valuation date is not a free choice. It exists only when the executor files a federal estate tax return and elects it, the election has to lower both the gross estate and the tax, and it cannot be revoked (26 U.S.C. § 2032).
Which condition? The house as it was on that date, before any later kitchen or roof work. Dated photographs, old listings, inspection reports and invoices help reconstruct it.
Which evidence? Sales and market conditions around the effective date, weighed and explained by the appraiser in the report.
The Assessor's number belongs to a different date
The Maricopa County Assessor's Office mails a Notice of Valuation every year with a full cash value and a limited property value. By statute the valuation date for real property is January 1 of the year preceding the tax year (A.R.S. § 42-11001), so the figure follows the tax calendar, not the date someone died.
The Assessor's valuation notice FAQ describes full cash value as an estimate of market value subject to conditions unique to mass appraisal, and says the limited property value is generally held to an increase of 5% a year. Neither is an opinion of what one house, in its actual condition, was worth on the date of death.
Tax questions for your adviser, not for the appraiser
Arizona does not impose an estate tax, an inheritance tax or a gift tax, and no federal inheritance tax exists. The federal estate tax falls on the estate. For a U.S. citizen or resident who dies in 2026, the IRS requires a return only when the gross estate, with certain lifetime gifts added, is more than $15,000,000, or when the executor files to pass a deceased spouse's unused exclusion to the survivor. Where a return is due, the Form 706 instructions generally allow nine months from the date of death, and they ask the executor to explain how real estate values were determined and to attach copies of any appraisals.
The date-of-death rule has exceptions, and where a value is finally determined for federal estate tax the heir's basis may have to be consistent with it. An appraisal does not guarantee a tax result or acceptance by the IRS.
What to bring to the first call
| What to have | Why we ask |
|---|---|
| Street address and kind of property | Tells us where the home is and which sales are relevant. |
| The effective date your adviser has named | A date-of-death value and a value for a later decision are different assignments. |
| Records of the home's condition then, and of work done since | Lets the report describe the house as it was. |
| Who will use the report, and any filing date | Shapes the report and the schedule. |
How the assignment runs, step by step
- Set the scope. Tell us the property, the effective date, the users of the report and the date you need it. A fixed quote follows a brief intake.
- Gather the record. Arrange access and send the dated records you have.
- Research the period. The appraiser studies the sales and market conditions that applied on the effective date and reconciles them into an opinion of value.
- Check the report. Confirm that the date, the stated use and the assumptions match what you asked for.
Our state-certified residential appraisers work to USPAP, which sets how an appraisal is developed and reported. Whether the IRS, a court or another reader accepts a given report is their decision.
Fees and timing for a retrospective value
The fee guide on our home page reads: "Typical fees range from $450–$950." It is a guide, not a quote for a retrospective assignment. How far back the date is, the property and your deadline are discussed first, and the scope, fee and delivery date should be put in writing.
Our About page says: "Standard delivery in 3-7 business days, with rush service available for urgent deadlines." If a filing date is close, see rush appraisals. If an estate is being administered, probate appraisals explains the Arizona inventory.
Begin with the address and the effective date
Send the address of the Peoria home, the date your adviser gave you and a line on what the figure is for.
Get a date-of-death appraisal quote | Call +1-602-837-3118
Drafted with AI assistance for GPS Home Appraisal and checked against the IRS and Arizona pages linked above. It does not value any property and is not tax or legal advice.