Date of Death Appraisals & Alternate Valuation Date: The Complete Guide

When someone passes away, one of the most confusing parts of managing their estate is figuring out what their real estate is worth and when that value should be determined. Executors and families often hear terms like Date of Death Appraisal and Alternate Valuation Date but aren’t sure which applies to them or precisely when a valuation is required.

This guide breaks everything down in clear, practical terms so you can determine how to move forward.

What Is a Date of Death Appraisal (DOD)?

A Date of Death appraisal is a professional real estate valuation that determines the fair market value of a property as of the exact date the property owner passed away.

The DOD is most needed for:

• Estate tax reporting
• Probate
• Trust administration
• Establishing a step-up in basis
• Dividing assets among heirs
• Refinancing into a trust or beneficiary’s name

What Is the Alternate Valuation Date (AVD)?

The Alternate Valuation Date is exactly 6 months after the date of death.

This option is only available if it reduces the overall estate tax.

The AVD can be beneficial when:

• Property values dropped after the owner passed away
• The original Date of Death value would cause the estate to owe more tax
• Market conditions changed within that six-month window

If the AVD is elected, all assets in the estate must use it — not just the real estate.

How Do You Know Which Date to Choose?

You typically choose the date that most benefits the estate financially and legally.

Executors or attorneys often compare:

• Market value on the date of death
• Market value six months later
• Whether the estate is taxable
• Whether beneficiaries plan to sell or keep the home

If estate taxes aren’t an issue, the Date of Death appraisal is almost always used.

How Do You Know If and When You Need an Appraisal?

Many executors are unsure when a valuation is required. Here’s the simplest breakdown:

✔ You need an appraisal if:

• The estate may owe federal or state estate taxes
• You are entering probate
• The estate attorney instructs you to obtain a valuation
• Multiple heirs need a fair and legal way to divide assets
• You plan to sell the property and need the step-up in basis documented
• You are preparing IRS Form 706 or 8971

✔ You may also need an appraisal when:

• The property is being transferred to an heir
• You need documentation to avoid future disputes
• The trust requires formal valuation for accounting

Do You Need an Appraisal Even if You Aren’t Selling the Property?

Yes, in many cases you still do.

Even if the home is staying in the family, a Date of Death appraisal is often necessary because:

• It sets the official stepped-up basis, which can save tens of thousands in future capital gains taxes
• It protects heirs if the IRS ever audits the estate
• It ensures fair distribution when one heir keeps the house and others receive different assets
• Attorneys and CPAs often require it for proper estate documentation

You do not need to sell the property for the appraisal to matter — the IRS still needs accurate reporting.

Why These Appraisals Matter (Even Years Later)

Skipping an appraisal can create major problems down the road:

• Incorrect capital gains taxes when the home is sold
• Heirs paying more in taxes than necessary
• IRS disputes due to missing documentation
• Delays in transferring ownership or closing the estate

Most families regret not getting an official Date of Death appraisal, even if the house wasn’t sold for years.

Our Recommendation: Get the Correct Valuation Early

Date of Death and Alternate Valuation Date appraisals are essential tools that protect the estate, simplify probate, and prevent tax issues. Whether you plan to sell the property or keep it in the family, getting the correct valuation early ensures accurate reporting and peace of mind.

If you’re unsure which valuation date is right for your situation, or whether you need a probate or estate appraisal at all, a qualified estate appraiser or estate attorney can help guide you through the process. Don’t hesitate to contact us and we can help with the process.

Also, check out our Guide to Real Asset Compliance for Trusts and Estates.

This post was originally published in September 2024 but updated and republished in March 2026.