What you are actually buying
A deadline for the other side.
Most people assume the appraisal exists to work out a tax. Usually there is no tax — most gifts of a family property sit comfortably under the lifetime exemption and nothing is owed.
What the appraisal does is start a clock. A gift reported on Form 709 with adequate disclosure opens a three-year assessment period, and when it closes the IRS can no longer come back and put a different number on the gift.
Disclose inadequately and that period never begins. The value sits open with no expiry. It can be reopened many years later, by which point the property has appreciated and whatever evidence existed of its worth on the day has scattered.
So this is not really about the return being filed this spring. It is about making sure a transfer made now cannot be re-argued in fifteen years against an estate, by people who were not there and cannot ask anyone who was.
Dated to the gift, not to the filing
The effective date is the day the gift was made. Not today, not the filing date.
Where the gift happened in a prior year this becomes a retrospective assignment — only sales that had closed by that date, and market conditions as they actually stood then rather than as they stand now.
A current-value appraisal ordered for a gift made two years ago is a competent answer to a question nobody asked, and it will not do the job on the return.
A share is not a fraction of the whole
The arrangement is a common one. Parents move a half interest to a child, or a property gets divided among several children across successive years.
An undivided share, though, is not worth the whole value divided by the fraction. Whoever holds it cannot sell the house on their own, cannot decide alone what happens to it, and would find almost no market for the interest by itself.
Those are genuine constraints on what a willing buyer would pay for it, and they have to be reasoned through in the report rather than waved away — in either direction, because overstating the effect is as indefensible as ignoring it.
Tell us at the start precisely what interest is moving. It changes the work.
The New Jersey angle
There is no gift tax here. The reporting obligation is entirely federal.
New Jersey does have an inheritance tax, and it reaches back over gifts made within three years of death — presumed made in contemplation of death unless shown otherwise.
For a property given away late in life, then, both the gift-date value and the date-of-death value can end up mattering, sometimes to different beneficiary classes at different rates. Where that is the shape of things, say so and the two assignments can be scoped together rather than commissioned twice.
One practical point. Deeds are recorded here and the consideration on them is public. A gift structured as a nominal sale is visible to anybody who looks.
What you receive
A written report dated to the day of the gift, with a fair market value conclusion and the comparable sales behind it, adjustments explained rather than asserted.
The appraiser’s qualifications and the basis of valuation are set out on its face, under a signed USPAP certification. It goes to you, and onward to counsel or the accountant when you instruct us in writing.
This page describes appraisal practice. It is not legal or tax advice. Whether and how to report a gift belongs with your attorney and accountant, and the adequate disclosure rules have requirements beyond the appraisal itself.
New Jersey specifics
- There is no New Jersey gift tax. Everything reportable about a gift is federal.
- New Jersey does levy inheritance tax, and it reaches back over gifts made within three years of death, which are presumed made in contemplation of death unless shown otherwise. One property can end up needing both a gift value and a date-of-death value.
- Deeds are public here, consideration included. A gift dressed up as a nominal sale is visible to anybody who cares to look, the Division of Taxation among them.
What you receive
- A report dated to the day of the gift
- A fair market value conclusion built on sales that had closed by then
- The appraiser's qualifications and the basis of valuation, as the disclosure rules contemplate
- Signed USPAP certification
- Delivery to you and, on written instruction, to counsel or the accountant
What we need from you
- The date of the gift, and whether it has happened yet
- Who is giving and who is receiving — a part interest is a different assignment
- Whether the whole fee is moving or an undivided share of it
- The deed or the block and lot, and access where the property can still be seen