Assets such as real estate, business interests, collectibles, personal property, and intellectual property may have to be assigned a value for tax purposes when inherited or given away. If this is the case, you will want to have a professional valuation done.
Suppose, for example, you inherit a vacation home that was purchased many years ago. You should have it appraised. In case of a later sale, you will want to know the stepped-up basis.
Someone who inherits an appreciated asset generally can get its basis increased to the date-of-death value, reducing the tax on a subsequent sale. If that home was purchased for $100,000 but worth $200,000 when the owner died, you’ll have a $200,000 basis in the property; if you sell it for $220,000, for example, your gain will be only $20,000.
You also might get an appraisal for assets that have not been inherited. A well-reasoned appraisal can show the value of such an asset when you want to sell it.
There is nothing ethically wrong with indicating how the appraisal will be used. If large amounts are involved, ask an attorney to hire the appraiser. Another appraisal might be sought, to get a better result, and the process will be protected by attorney-client privilege.
To find an appraiser, you might start with a local accounting firm. This firm might have one or more partners who can perform appraisals. If not, the firm may be able to recommend someone.
What’s more, every appraiser won’t be able to value every type of asset. Real estate appraisers, for example, might hold designations such as Independent Fee Appraiser (IFA) or Member Appraisal Institute (MAI). Make sure that you hire someone who is familiar with the local real estate market. For collectibles, local auction houses may be good sources of appraisals, if they have someone on-staff who is knowledgeable about the type of item you’d like valued.