You are about to sell a house you inherited, or your accountant has asked for a number for the tax return, and the house was your parent's or your spouse's. Before anything else, you need to know what the home was worth on the day the owner passed away. Nothing you can see today answers that. Not the house, not the listings.
Why does the value look backward?
For an heir, the starting point for any later gain is generally the home's fair market value on the date the owner passed (Internal Revenue Code section 1014(a)). If the executor chooses the alternate valuation date, it is the value six months later instead (section 2032). That choice is allowed only when it lowers both the value of the estate and the estate tax, and it cannot be undone. People call this a "step-up", but the adjustment can go down as well as up, so the word promises nothing about your tax. Your tax adviser settles the date before a report is ordered.
You will hear this kind of appraisal called step-up, date-of-death or retrospective. They all mean the same thing: one house, valued as of a past day, from the market of that time.
Does my spouse's half get the new value too?
Possibly. California is a community property state, and for community property the surviving spouse's half can get the new basis as well as the half that passed (section 1014(b)(6); see IRS Publication 551). The condition: at least half of the whole community property must have counted in the estate of the spouse who passed. And whether your Escondido home is community property at all depends on your facts. Ask your tax adviser before you count on it. Our divorce page touches on how California treats community property.
What does a report for a past date have to show?
Three things. First, the date. A report written now can speak to a day months or years ago, using sales that closed around then. Second, the house as it was that day, not as it stands now. Third, whatever records survive from the time: dated photos, an earlier listing, a permit that shows when the kitchen was redone, a contractor's invoice. The appraiser decides which of them fit and says how they were used.
The county's Assessor/Recorder/County Clerk parcel search can confirm facts about the lot. Treat the tax roll and recorded sales as leads to check, not as the value on your day. For a feel of the Escondido market in one recent month, see the service area page. It is context only; a basis report needs the market of your date.
Is there an inheritance tax?
California: no, for anyone who passed on or after June 8, 1982, and there is no state estate tax return for deaths since 2005 (State Controller).
Federal: no inheritance tax, but there is an estate tax paid by the estate. For someone who passes in 2026 it comes into play only above $15,000,000, or when the executor chooses to pass a spouse's unused exemption to the surviving spouse (Form 706 instructions). When a return is filed, the house is reported at its value on the date the owner passed, or the alternate date, with appraisals attached.
If you sell: generally only the gain above the basis this appraisal documents is taxable (IRS Publication 525; an inheritance itself is not income, though rent the house earns later is).
What about the property tax bill?
That is a separate system. When a parent's home goes to a child, Proposition 19 can change the property tax, and the county Assessor handles that claim; the basics are on our estate appraisal page. If the home is in a probate case, the court's inventory value is another step, covered on the probate page.
Your attorney or tax adviser decides the date, the use and the paperwork. An appraisal does not decide a tax result, and neither the IRS nor a court has to accept it.
What happens when I call?
- You tell us the address, what the value is for and the date your adviser wants. We put the scope, fee and delivery estimate in writing.
- If the report needs an inspection, we arrange entry. Either way, you send whatever dated records you have.
- The appraiser studies sales from around your date and explains how the opinion was reached.
- You check the date, the stated use and the assumptions, and tell us about any factual mistake.
Digging into an earlier market, the size of the home and your deadline all affect fee and timing, so confirm availability before you tie the report to a filing date.
What to have ready
- The Escondido address and property type
- The date of passing, or the alternate date your adviser names, and what the value is for
- Your adviser's view on whether the home was community property
- Your deadline, any remodels or repairs since, and dated records
Call 442-248-3110 or request a retrospective appraisal quote.