A Tortilla Flat stepped-up-basis appraisal should document the historical real-estate value cleanly and leave tax treatment to the taxpayer's advisers. A broader sale can be relevant only if it reflects similarly remote property rights and residential utility. The appraiser develops the real estate value opinion; the taxpayer and tax professionals determine the applicable basis treatment.
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 Tortilla Flat, the appraisal should consider remote access only when it changes the subject's competitive position.
In a stepped-up-basis appraisal, a broader sale can be relevant only if it reflects similarly remote property rights and residential utility. For stepped-up-basis support, the question is whether the feature affected fair market value on the applicable historical 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.
Historical listings, condition evidence, ownership records, permits, and later improvement documentation can help support the earlier fair market value. 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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