So, I now need to ask the question another way. Are you implying that fair market value is not supposed to consider selling costs such as realtor commission, etc? I suspect that is so, but I want to be sure. Given how high commissions are, that would make a big difference in how much the loss is. To restate, if the sales price were the fair market value, does that mean there is a loss equal to the selling expenses (all else equal)? Or is the appraiser supposed to subtract what he thinks are market sales commissions?
Thanks for the advice on the appraisal. The problem is that it has already been sold so s/he wouldn't be able to see the inside of the unit now and my father passed away last at 98 and had become a pack rat with a nasty little dog who was allowed to do its business anywhere it liked and the place had bugs everywhere. I'll stop out of respect for my dearly departed parents, but four children/spouses spent the better part of three weeks getting it in decent enough shape to let a realtor even see it (and it took the realtor a few more weeks cleaning it up before putting it on the market as well). Yes, we did spend a bit of that three weeks looking for hidden valuables as they were prone to hide things in later years, but most of our time was just getting it presentable, not to mention getting new A/C, making repairs, etc.
Frankly, if a place sells in three months and the trustee told the IRS they thought that was the best estimate of market value upon data of death, would they really question that? I'm sure some appraisers are smart but the market is smarter and three months is not very long.
It was their estate attorney who told me a broker valuation would suffice although that WAS after my mom's passing which was three months earlier than my dad's. I assumed the advice would not change when my dad passed.
Thanks much!
