Inherited house FMV when?

[VolvoGirl]

Father just died 7/25/2021.  We called a real estate agent to get the value on date of death but he said we have 6 months to value it?  So it could go up?  Is that right, 6 months?  I don't know what they paid for it.  Mother died Oct 2020.  

[tagteam]

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@VolvoGirl wrote:

Father just died 7/25/2021.  We called a real estate agent to get the value on date of death but he said we have 6 months to value it?  So it could go up?  Is that right, 6 months? 

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I am very sorry for your loss.

The real estate agent is correct but only if you elect to use an alternate valuation date (per Section 2032) and you can only elect to use an alternate valuation date if using that date would result in both lowering the value of the gross estate and lowering the resultant estate tax. 

In short, unless your father's estate is very large (such as over $11.7 million), then the alternate valuation date does not come into play and you would simply use the fair market value on the date of death.

[DoninGA]

IRS Publication 523 page 10 - https://www.irs.gov/pub/irs-pdf/p523.pdf#page=10

Home acquired from a decedent who died before or after 2010.

If you inherited your home from a decedent who died before or after 2010, your basis is the fair market value of the property on the date of the decedent's death (or the later alternate valuation date chosen by the personal representative of the estate). If an estate tax return was filed or required to be filed, the value of the property listed on the estate tax return is your basis. If a federal estate tax return didn’t have to be filed, your basis in the home is the same as its appraised value at the date of death, for purposes of state inheritance or transmission taxes.