For inherited property in Rainbow Valley, basis support starts with a defensible historical value rather than with the later sale price or tax outcome. Water source, septic, power, road access, and legal access can materially affect marketability. The historical value needs to stand on market evidence from the relevant date rather than on the property's later sale price.
The appraiser's role is to develop a supported fair market value for the applicable historical date. The taxpayer, CPA, attorney, or other adviser determines how that value is used for basis and tax reporting. For Rainbow Valley, the appraisal should consider growth frontier only when it changes the subject's competitive position.
In a stepped-up-basis appraisal, water source, septic, power, road access, and legal access can materially affect marketability. That feature should not be carried into the historical value unless evidence shows it existed and mattered on the valuation date.
The appraisal should support the real estate value on the applicable historical date. It does not calculate capital gains, determine the taxpayer's basis election, or replace advice from a CPA or attorney.
Date-of-death information, prior listings, photographs, permits, deeds, and improvement records can help create a durable historical value record. That evidence helps document the real estate value independently of whatever tax treatment is later applied.
A stepped-up-basis appraisal should document the property and market evidence clearly enough that the historical fair market value can be understood later, even if the property is sold or changed afterward.
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