When a loved one passes away and leaves behind land or real estate, one of the first steps in settling the estate is determining the property’s Value on Death. This process is commonly referred to as a Value on Death Appraisal or a Date of Death Appraisal.
For families dealing with inherited land, farms, hunting property, recreational acreage, or development ground, understanding this appraisal can help avoid confusion, tax issues, and disagreements among heirs.
What Is a Value on Death Appraisal?
A Value on Death Appraisal determines the fair market value of a property as of the date the owner passed away.
Unlike a standard appraisal that reflects today’s market value, a Value on Death Appraisal looks backward in time. The appraiser researches market conditions, comparable sales, and property characteristics that existed on the exact date of death.
This type of appraisal is often required during:
Why Is a Value on Death Appraisal Important for Land?
Land can be difficult to value because every property is unique. Factors such as location, soil quality, access, timber value, hunting potential, water features, zoning, and development opportunities all impact value.
A proper appraisal provides an objective opinion of value that helps:
For inherited land, the appraisal also establishes what is called a “stepped-up basis.”
Understanding the Stepped-Up Basis
One of the biggest financial benefits heirs receive is the stepped-up tax basis.
For example:
If a parent purchased land decades ago for $40,000, but the property was worth $300,000 on the date of death, the heirs typically inherit the property at the new $300,000 basis.
If the heirs later sell the land for $310,000, capital gains taxes may only apply to the $10,000 increase after inheritance—not the original purchase price.
Without a Value on Death Appraisal, proving that stepped-up basis later can become very difficult.
How Is Land Appraised for a Date of Death?
A certified appraiser will typically:
For agricultural or rural land, appraisers may also evaluate:
When Should Families Get the Appraisal Done?
It’s best to obtain the appraisal as soon as reasonably possible after death, even though the value itself is tied to the original date of death.
Waiting too long can make it harder to locate comparable sales and supporting market data from that time period.
An attorney, CPA, estate planner, or Realtor may recommend obtaining the appraisal early in the probate or trust process.
Who Orders the Appraisal?
The appraisal is commonly ordered by:
It’s important to work with a qualified appraiser familiar with rural land and local market conditions.
Final Thoughts
A Value on Death Appraisal is more than just paperwork—it provides clarity, fairness, and financial protection for families inheriting land.
Whether the property is farmland, recreational acreage, hunting land, or development property, having an accurate appraisal can simplify estate settlement and help heirs make informed decisions about the future of the property.
If you have questions about inherited land or need guidance on the next steps, working with experienced real estate and appraisal professionals can make the process much smoother.
Need Help Determining the Value of Inherited Land?
Although the professionals at Nikolaisen Land Company are not certified real estate appraisers, we are licensed real estate professionals with years of experience valuing land and other real estate throughout the region. We can provide a comprehensive market analysis (CMA), Broker’s Price Opinion (BPO), or land valuation that includes the necessary market data and supporting information to help establish the property’s value at the requested time.
Whether you are settling an estate, working through probate, planning for inheritance purposes, or simply need guidance on land value, our team is here to help. Contact Nikolaisen Land Company today for a comprehensive land valuation and expert insight into your property.
