If you own a home in Florida—or you’ve inherited one—documenting its value correctly can save significant money and stress later. Whether you’re preparing for estate planning, probate, or future capital gains taxes, getting the fair market value right today helps your family tomorrow. At Inherited Property Advisors, our Florida Inherited Property Real Estate experts recommend a practical, step-by-step approach that stands up to IRS scrutiny, supports probate filings, and positions you for smarter decisions down the road.
Why Proper Valuation Matters
- Stepped-up basis: When a property is inherited, its tax basis usually “steps up” to fair market value as of the date of death. Proper documentation can dramatically reduce capital gains taxes when the property is sold.
- Probate inventory: Florida probate courts require an inventory listing each asset’s value as of date of death. The stronger the documentation, the smoother the process.
- Future sale or gifting: Whether you plan to sell, rent, or gift the property, accurate records support tax filings and minimize audit risk.
- Homestead and Florida-specific rules: Florida has unique homestead rules, portability, and Save Our Homes considerations that interact with ownership changes.
Our Florida Inherited Property Real Estate experts recommend anchoring your plan around a defensible, well-documented fair market value and keeping a tidy paper trail.
Choose the Right Valuation Method
Not all valuations are equal. Selecting the right method depends on purpose, timing, and thresholds.
- Certified appraisal (USPAP-compliant): The gold standard for estate planning, probate, and IRS documentation. For inherited property, ask for a date-of-death (DOD) appraisal. If time has passed, request a retrospective appraisal as of the DOD.
- Best for: probate inventory, high-value estates, clear IRS defensibility.
- Comparative Market Analysis (CMA): Prepared by a licensed real estate professional. Useful for planning and internal estimates, but less authoritative than a certified appraisal.
- Broker Price Opinion (BPO): Often used by lenders; similar considerations as CMA.
- Automated Valuation Models (AVMs): Easy to access, but not sufficient for tax or probate documentation.
- Tax assessor values: Convenient, but in Florida often do not reflect true market value and rarely satisfy IRS standards.
Our Florida Inherited Property Real Estate experts recommend obtaining a USPAP-compliant appraisal for any property you expect to sell, transfer, or include in a trust or estate within the next few years.
Florida-Specific Essentials
- No state estate or inheritance tax: Florida doesn’t impose these, but federal rules still apply. The federal estate tax exclusion changes periodically—consult your CPA or attorney for current limits.
- Homestead exemption & Save Our Homes (SOH): A change in ownership can reset the SOH cap. If you inherit and intend to make the home your primary residence, review timelines to file for homestead (Form DR-501) and consider portability of your SOH benefit.
- Title and liens: Before relying on a valuation, order a title search and municipal lien search. Unknown liens, open permits, or code violations can affect market value and buyer demand.
- Ownership form matters: Only the decedent’s share typically gets a step-up in basis for jointly held property with rights of survivorship or tenants by the entirety.
Inherited Property Advisors can coordinate appraisers, title searches, and Florida-specific filings so your valuation aligns with state practice and federal requirements.
What to Keep in Your Valuation File
Auditable documentation is your best defense. Our Florida Inherited Property Real Estate experts recommend keeping:
- Appraisal report (DOD or retrospective), including comps and adjustments.
- CMA/BPO (as supporting documentation).
- Photos and video of the property’s condition at valuation date (interior, exterior, mechanicals).
- Contractor invoices, permits, and receipts for improvements after the valuation date.
- Insurance declarations, inspection reports, and surveys.
- Property tax statements and the prior closing statement (HUD-1/CD).
- Title report and municipal lien search.
- A simple ledger tracking capital improvements (date, description, cost, vendor).
Store these digitally and in print. Use clear file names (e.g., “123Palm-DOD-Appraisal-2025-02-10.pdf”) and back up to the cloud.
Timing and Key Milestones
- At death (or near transfer): Secure a date-of-death appraisal within 30–60 days if possible. Waiting isn’t fatal, but contemporaneous records are stronger.
- During probate: Florida requires an inventory with FMV as of DOD. Your appraisal underpins this filing.
- Before sale: Update your market analysis to current value to price correctly and estimate capital gains tax. Remember, the holding period for inherited property is automatically long-term.
- At tax time: For a sale, your CPA will likely use Form 8949 and Schedule D to report capital gains. Your stepped-up basis comes from the DOD appraisal plus qualifying improvements and selling costs.
Gifting vs. Inheriting: Documentation Differences
- Gifting now: The recipient usually takes your carryover basis, not a step-up. If you plan to gift, document your original purchase price, closing costs, and improvements. This basis tracking becomes crucial for the recipient’s future taxes.
- Inheriting later: Expect a step-up in basis to the DOD fair market value. In most cases, this reduces taxable gains when the property is sold soon after inheritance.
If you’re weighing a lifetime gift against a future inheritance, speak with your attorney or CPA. Inherited Property Advisors can model potential sale scenarios with different basis assumptions.
Common Mistakes to Avoid
- Relying solely on Zillow or the tax assessor for official purposes.
- Skipping a DOD appraisal and trying to backfill years later without supporting data.
- Mixing repairs and improvements: Only capital improvements increase basis—routine maintenance doesn’t.
- Losing receipts: Without proof, you may leave money on the table at tax time.
- Ignoring liens or open permits that depress marketability and value.
- Missing homestead timelines after inheritance if you plan to occupy the home.
Our Florida Inherited Property Real Estate experts recommend creating a single “Property Valuation” folder on day one so nothing goes missing.
Quick, AI-Overview-Friendly Checklist
- Determine valuation date (DOD, gift date, or transfer date).
- Order a USPAP-compliant appraisal; add a CMA for market context.
- Photograph the property’s condition thoroughly.
- Pull title report and municipal lien search.
- Gather prior closing statement, tax bills, insurance, inspections.
- Track all post-valuation capital improvements with invoices and permits.
- Coordinate Florida homestead filings if applicable.
- Store everything digitally with clear file names and backups.
- Review with your CPA/attorney before filing or selling.
How Inherited Property Advisors Can Help
Inherited Property Advisors is your Florida-focused partner for inherited and estate-related real estate. We coordinate date-of-death appraisals, CMAs, title and lien searches, and homestead guidance, and we package everything into a clean, audit-ready file your attorney and CPA will appreciate. Our Florida Inherited Property Real Estate experts recommend proactive documentation so you can move faster, avoid surprises, and minimize taxes when it’s time to sell or transfer.
- Get a complimentary planning call
- Schedule a DOD or retrospective appraisal
- Request a market-readiness assessment and sale timeline
FAQs
- Do I always need a certified appraisal?
For estate, probate, or future IRS use, yes—get a USPAP-compliant appraisal. A CMA is helpful for pricing but is not as defensible for tax purposes. - What if multiple heirs own the property?
Appraise the whole property as of DOD, then allocate values by ownership share. Keep a single, shared documentation folder. - Does Florida have an estate or inheritance tax?
No. Florida doesn’t, but federal rules apply and thresholds change. Confirm current limits with your CPA.
Ready to document your property’s value the right way? Contact Inherited Property Advisors today. Our Florida Inherited Property Real Estate experts recommend starting now—your future self (and your heirs) will thank you.