How do you determine fair market value of inherited property?

Fair market value (FMV) is what a willing buyer would pay a willing seller in an open market on the date of death. For inherited real estate, the most solid method is a written appraisal by a licensed appraiser, who looks at recent comparable sales, condition, location, and market trends. A comparative market analysis from a real estate agent, tax assessments, or even an actual arm’s‑length sale close to the date of death can also be used, though they’re usually less formal. For non‑real‑estate assets (like stocks), FMV is typically the market price on the date of death. FMV becomes your basis for future capital gains tax on a later sale.

Learn more about our Estate Tax appraisals.