As the year wraps up and families across the Phoenix Metropolitan Area gather, many people take time to review their financial plans—especially when it comes to estates, trusts, and long-term property decisions. One of the most common questions we receive from local clients, estate attorneys, and CPAs here in Greater Phoenix this time of year is:
“Why do I need a retroactive appraisal?”
Let’s break it down in a simple, easy-to-understand way.
What Is a Retroactive (Date-of-Death) Appraisal?
A retroactive appraisal determines a property’s value as of a specific date in the past, most often the date of death when real estate is inherited. Even if several years have passed, the IRS requires an accurate and well-supported valuation tied to that exact historical date.
For Phoenix-area properties—including Scottsdale, Gilbert, Chandler, Mesa, Tempe, Peoria, and the wider Maricopa County market—a certified appraiser analyzes past market conditions, historical comparable sales, and available data from that time to establish a credible value.
Why Attorneys Request This: The Step-Up in Basis
When someone inherits real estate, the IRS allows for what is known as a “step-up in basis.”
In simple terms:
The property’s cost basis is adjusted to its fair market value on the date of death.
This offers significant tax benefits to heirs because it often reduces the capital gains tax owed when the property is sold.
Example:
Original purchase price in 1980: $90,000
Date-of-death value in 2021: $480,000
Sale price in 2024: $500,000
In this scenario, capital gains tax is applied only to the difference between $480,000 and $500,000—not between $90,000 and $500,000. This step-up in basis can save heirs a considerable amount of money.
This is especially important in the Phoenix market, where property values have changed dramatically over the decades.
Why Accurate Appraisals Matter in the Phoenix Metro Area
Estate attorneys and CPAs rely on professional real estate appraisals because:
IRS guidelines require credible, defensible valuations
Real estate markets change over time, especially in fast-growing areas like Greater Phoenix
A correct date-of-death value ensures tax compliance
It protects heirs from paying unnecessary capital gains
It helps settle estates efficiently and minimizes disputes
A well-supported appraisal not only meets legal requirements but also provides clarity during what is often an emotional and complex process for families in Maricopa County and surrounding communities.
When to Consider an Estate or Trust Appraisal
You may need an estate or trust appraisal if you are:
Handling probate
Transferring property into or out of a trust
Planning to sell inherited real estate
Preparing to file or update estate tax documents
Responding to an attorney or CPA’s request for formal valuation
Needing a neutral, fair value when multiple heirs are involved
This applies whether the property is in Phoenix, Scottsdale, Mesa, Chandler, Gilbert, Peoria, Tempe, or any surrounding area in the Valley.
Closing Out the Year
As we prepare for the new year, we want to extend our appreciation to our clients and professional partners throughout the Phoenix Metropolitan Area. Thank you for trusting OnPoint Appraisals with your valuation needs.
If you or your clients require assistance with estate or trust appraisals, including date-of-death or retroactive valuations for Phoenix-area properties, we are here to help.