Real Property Appraisals for IRS Forms 706 and 709

IRS Forms 706 and 709 address different transfers and can require different valuation instructions. Homeowners, attorneys, and accountants should identify the form, property interest, effective date, intended use, and required attachments before the appraisal begins.

Eagle Home Appraisal provides competent, credible, and reliable residential real property valuations for IRS reporting. We do not determine whether a return is required, calculate estate or gift tax, select elections, or provide legal advice.

We do not use the standard 1004 lending form for this work. The appraisal report is formatted for legal and tax purposes, not mortgage underwriting.

Form 706: The United States Estate (and Generation-Skipping Transfer) Tax Return.

Form 709: The United States Gift (and Generation-Skipping Transfer) Tax Return.

Always use the form and official instructions for the applicable filing year. Requirements and amounts can change.

Form 706 and estate property values

The Form 706 instructions generally direct the executor to value property included in the gross estate as of the date of the owner's passing unless an authorized alternate valuation election applies. The instructions include schedules for different asset types and explain the supporting information expected for reported values.

For residential real property, the appraisal question may include:

• The fair market value as of the date of the owner's passing.
• A different date supplied in writing when an authorized alternate valuation method applies.
• The value of the interest actually included in the estate.
• Property characteristics and condition as they existed on the effective date.
• Supporting market evidence and assumptions appropriate to that date.

The appraiser should not choose between the regular and alternate valuation methods. That decision belongs to the executor and tax adviser.

Form 709 and gifts of real property

Form 709 is used for federal gift and certain generation-skipping transfer tax reporting. Its instructions state that the value of a gift is generally the property's fair market value on the date the gift is made. The instructions also address disclosure of how value was determined and state that an appraisal used to determine the value of real estate or other property should be attached.

Depending on the reporting position and transfer, the tax adviser may request an appraisal or another detailed valuation disclosure. The adviser should identify the applicable standard and documentation before the appraiser accepts the assignment. A Form 709 disclosure request should not automatically be treated as the charitable-contribution standard described in Publication 561.

A gift appraisal may need clear information about:

• The date of the transfer.
• The property and ownership interest transferred.
• Whether the transfer involved all or part of an interest.
• The client and intended users.
• The intended use of the report.
• Any requested analysis involving a fractional interest or other ownership feature.

Do not assume a standard whole-property appraisal answers every gift-tax valuation question.

What Publication 561 means by "qualified appraisal"

IRS Publication 561 (12/2025), Determining the Value of Donated Property, addresses valuation and substantiation for noncash charitable contributions. It is not a general definition for every appraisal connected to Form 706 or Form 709.

The publication states, "A qualified appraisal is an appraisal document" that meets its listed requirements. Those requirements include:

• Preparation, signature, and dating by a qualified appraiser.
• Compliance with the substance and principles of USPAP.
• Compliance with Treasury Regulations section 1.170A-17(a).
• The required appraisal and contribution timing.
• No prohibited appraisal fee.

Publication 561 defines a qualified appraiser as an individual with verifiable education and experience in valuing the type of property involved. It also describes credential or education and experience requirements, regular paid appraisal work, excluded individuals, and declarations required in the appraisal and Form 8283.

Qualified appraisal, in context: A federal charitable-contribution substantiation term with requirements for the appraisal document, appraiser, timing, fee, and declaration. It is distinct from the appraisal and disclosure requirements associated with Forms 706 and 709.

Eagle Home Appraisal provides Qualified Appraisals for IRS purposes. George "Chip" Holmes, State Licensed Residential Appraiser, Nevada license #A.0006387-RES, and Kristen N. Aste, Nevada Certified Residential Appraiser #A.0007406-CR, are qualified appraisers who deliver them.

For a Charitable Donation Appraisal, the donor and tax adviser should identify the contribution date, property interest, filing year, Form 8283 requirements, and intended use before engagement. Eagle prepares the qualified appraisal to address the applicable appraisal requirements. See the IRS overview of Publication 561.

What "fair market value" means in these instructions

IRS valuation instructions generally describe fair market value as the price at which property would change hands between a willing buyer and willing seller, with neither compelled to act and both having reasonable knowledge of relevant facts.

Applying that definition to a specific residence requires market evidence. The appraiser analyzes the property, the relevant market period, comparable sales, and differences recognized by market participants.

Six items to confirm before ordering the appraisal

1. The filing form and year

Ask the adviser whether the work relates to Form 706, Form 709, another form, or estate records that may later support a filing. Use the current official instructions for the relevant filing year.

2. The effective date

For Form 706 work, this may be the date of the owner's passing or another authorized date selected by the executor and adviser. For Form 709 work, it may be the date the gift was made. Obtain the date in writing.

3. The property interest

Confirm whether the assignment concerns the entire property, a partial interest, an interest held in trust, community or separate property, or another defined interest. Legal counsel should explain the ownership rights to be valued.

4. The intended users

Identify who must be able to rely on the report, such as the client, executor, trustee, attorney, CPA, or agency. Do not assume everyone connected to the estate or gift is automatically an intended user.

5. The required report and attachments

The tax professional should specify the report format, statements, signed certifications, copies, and attachment needs. The appraiser can then determine whether the requested scope is appropriate.

6. The filing deadline

Provide the actual deadline and allow time for property access, historical research, document collection, report review, and adviser questions. A filing deadline does not change the amount of work needed for a credible appraisal.

What to provide to the appraiser

Once the assignment is defined, the work moves through consultation, research, market analysis, and delivery. Clear instructions at the start keep the appraisal focused on the correct filing purpose and effective date.

Useful information includes:

• Property address and assessor parcel number.
• Deed, title, trust, or transfer documents relevant to the interest.
• Date of passing or date of gift.
• Written instructions from the attorney or tax professional.
• Prior listings, photographs, permits, plans, or repair records.
• A chronology of additions, remodeling, damage, or deferred maintenance.
• Access information and a knowledgeable property contact.
• Any prior appraisal or valuation that the adviser wants considered.
• The applicable form schedule or attachment instructions.

The appraiser may request more information after reviewing the assignment.

Retrospective reports require historical evidence

When the effective date is in the past, current condition cannot simply be projected backward. The appraiser needs evidence about the property and market on the historical date.

Inspection scope fits the assignment. It may require a full interior inspection, an exterior-only inspection, or in some cases a records-and-photos analysis when reliable current photos exist, such as a recent listing. The appraiser still needs enough property records and period-specific market evidence to produce a supportable result.

If the residence was improved after the valuation date, document what changed and when. If it was sold later, provide the listing and transaction history. These records help the appraiser decide how later events relate to the earlier value.

Learn more about date-of-passing appraisals and why the appraisal date matters for inherited property.

For the related service scope, visit Estate and trust appraisals and Probate appraisals.

What an appraisal can and cannot support

An appraisal can provide a documented opinion of value for a defined property interest, effective date, and intended use. It can explain the market data, analysis, assumptions, and reconciliation behind that opinion.

It cannot establish:

• Whether Form 706 or Form 709 must be filed.
• Whether a transfer is taxable.
• The amount of any deduction, exclusion, credit, gain, loss, or tax.
• Whether an election is available or advisable.
• The legal ownership interest created by a deed or trust.
• Whether the IRS will accept a position or decline to examine a return.

The estate or donor should coordinate the appraisal with qualified advisers.

Frequently asked questions

Reviewed appraisal information

This page's professional appraisal content is reviewed by George "Chip" Holmes, State Licensed Residential Appraiser, Nevada license #A.0006387-RES. He has been licensed since December 2005 and appears in the ASC registry under 718720.

Eagle Home Appraisal focuses on Non-Lending residential work and prepares competent, credible, and reliable appraisal assignments in compliance with USPAP.

Discuss the assignment before ordering

Call (702) 920-4500 or contact Eagle Home Appraisal. Be ready to provide the property, form, effective date, ownership interest, intended users, adviser instructions, access details, and deadline.

A trustee looking for a trust appraiser should provide the relevant transfer and reporting instructions rather than assuming a standard trust assignment.