Can I use Zillow estimates and tax assessments to determine cost basis of my inherited property?

What about getting a real estate agent to do a comparative market analysis instead? Would that hold up better with the IRS than Zillow but cost less than a formal appraisal?

A comparative market analysis (CMA) from a real estate agent is definitely stronger documentation than a Zillow estimate. It's based on actual comparable sales and takes into account the specific features of your property. While not as comprehensive as a formal appraisal, a CMA would likely hold more weight with the IRS if questions ever arose. It's a good middle-ground option that provides better documentation than online estimates while costing significantly less than a certified appraisal. Just make sure the agent clearly indicates the valuation is as of the date of death, and keep all documentation of how the value was determined.

Wait, retroactive appraisals are a thing? How does that work? I inherited a place almost 8 months ago and never got an appraisal because I thought it was too late.

I'm hesitant about online services for tax advice... especially with something as important as property basis. How exactly did they analyze your documentation? Did they just tell you to get an appraisal or did they actually provide something more substantial?

Retroactive appraisals are definitely a thing! Professional appraisers can research what comparable properties were selling for on a specific date in the past. They use historical data to determine what the property was worth on that exact date. It's common for estates and inherited property situations. As long as you have good documentation about the property's condition at that time (photos are great for this), you can get a legitimate retroactive appraisal. They did much more than just tell me to get an appraisal. They analyzed the specific Zillow data and tax assessment I had, explained the gaps in that documentation, and outlined several options based on my risk tolerance. They showed me exactly what additional documentation would strengthen my position if I didn't want a full appraisal. They compared the costs of different approaches against the potential tax implications. It wasn't generic advice - it was specific to my property and situation.

How does this actually work though? Like are you giving them access to your personal info or something? Sounds sketchy to have some third party connecting you to the IRS.

Yeah right. I've been trying to talk to the IRS for months about my inherited property situation. No way some service can magically get through when nobody else can. Sounds like a scam to get desperate people's money.

They don't need access to your personal information. The service just places the call to the IRS and stays on hold for you. When an actual IRS representative picks up, you get a call connecting you directly to that agent. You never share your tax details with the service - they're just getting you past the hold time. It's definitely not a scam. The hold times with the IRS are brutal (my longest was over 4 hours before disconnecting). This service just handles that part for you. They use technology to stay in the phone queue while you go about your day. When they finally reach a human at the IRS, that's when you get connected. It saved me countless hours of frustration and I actually got my basis questions answered by an IRS agent.

Thanks for the advice. The property is worth around $400k based on those estimates, and I definitely plan to rent it for a few years at least. Would getting just the comparable sales data be enough, or is the formal appraisal really worth the money in your experience?

At a $400k value and with plans to claim depreciation deductions, I would strongly recommend getting a formal appraisal. The appraisal cost is deductible as an expense related to determining your tax liability, so the actual out-of-pocket is less than the sticker price. Comparable sales data alone leaves too much room for interpretation, especially when you're claiming depreciation deductions over multiple years. An appraisal provides a defensible valuation from a neutral third party, which is exactly what you want if questions ever arise. Consider it insurance against future headaches that could potentially cost much more than the appraisal itself.

That's actually risky advice. By the time you're selling, it can be much harder to establish what the property was worth years ago at date of death. Conditions change, neighborhoods change, and documentation gets harder to find. Plus you've already been claiming depreciation based on an unsubstantiated basis amount.

This is really helpful practical advice! I'm curious about the CMA approach - when you say "ask the right agent," what should I be looking for? Should I find someone who specializes in estate valuations, or would any experienced local agent be able to do a retroactive CMA for the date of death? Also, how do I make sure they understand it needs to be specifically valued as of that date rather than current market conditions?

Look for an agent who has experience with estate properties or REO (real estate owned) sales - they're more familiar with retroactive valuations. You don't necessarily need someone who specializes exclusively in estate valuations, but you want someone who understands the concept and has done it before. When you contact agents, be very clear about what you need: "I need a comparative market analysis for an inherited property valued as of [specific date of death], not current market value." Most experienced agents can do this by pulling comparable sales from a specific time period around that date. Make sure they document their methodology and clearly state the effective date of the valuation in their report. You want it to look professional and show they considered properties that sold within 3-6 months of the date of death. This creates a paper trail that shows you made a good faith effort to determine fair market value as of the correct date. A good agent will understand why you need this and should be willing to help, especially if there's potential you might list the property with them eventually.

This is really solid practical advice, thank you! I like the approach of using the higher estimate as a starting point while building comprehensive documentation. One question though - when you mention gathering comparable sales from within 6 months of the death date, is there a specific source you'd recommend for finding that data? I've looked at some online tools but I'm not sure how reliable they are for getting historical sales data with enough detail to create a proper paper trail. Also, regarding the retroactive appraisal option if needed later - is there typically a time limit on how far back appraisers can go? My uncle passed about a month ago, but I want to understand if waiting a year or two would make it harder to get accurate retroactive valuation.

For gathering comparable sales data, I'd recommend starting with your county assessor's website - many now have searchable databases that show recent sales with dates and prices. Realtor.com and Zillow also have "recently sold" sections that can give you basic comps, though you'll want to verify the details. For more comprehensive data, most public libraries provide free access to real estate databases like RealtyTrac or similar services. You can also contact a local real estate agent and explain your situation - many are willing to pull a basic comp report for free, especially if you mention you might need their services later. Regarding retroactive appraisals, most professional appraisers can go back several years without major issues, as long as there's sufficient comparable sales data from that time period. A month is absolutely no problem - even 2-3 years is typically manageable. The key is having good documentation of the property's condition at the time (photos are invaluable here) and access to historical sales data in the area. The main limitation is usually the availability of comparable sales data rather than time itself. In active real estate markets, appraisers can usually find adequate comps going back quite far. Just keep in mind that retroactive appraisals might cost slightly more than current appraisals due to the additional research involved.

This is exactly the kind of comprehensive approach I wish I had seen when I was dealing with my inherited property situation! Your point about consistency across multiple sources is really valuable - I hadn't thought about it that way, but you're absolutely right that having several estimates in a similar range creates a much stronger foundation than relying on just one or two sources. The broker price opinion (BPO) suggestion is particularly interesting. I'm not familiar with those - are they typically less expensive than full appraisals but more detailed than a basic CMA? And when you mention spending $100-200 on additional documentation, what specific services does that usually cover? I'm definitely taking your advice about documenting everything now while it's fresh. I've been putting off taking detailed photos of the property's current condition, but you've convinced me that's a mistake I'll regret later. Thanks for sharing your experience - it's really helpful to hear from someone who's been through the whole process and can point out the pitfalls to avoid.

This is really excellent comprehensive advice! I appreciate the practical approach of using the Zillow estimate as a baseline while building stronger supporting documentation. The 7.5% variance perspective is reassuring too - I was worried that gap might be a red flag. I'm definitely going to pursue the CMA route now. Several people have mentioned that agents will often do these for free, especially with potential future business. Do you have any tips on how to approach agents about this? Should I be upfront about it being for tax basis purposes, or frame it differently? Also, regarding the comparable sales data - are there any specific details I should make sure to capture beyond just sale prices and dates? Things like square footage, lot size, condition differences, etc.? I want to make sure if I'm going to build this documentation, I'm doing it thoroughly enough to actually strengthen my position. Thanks for breaking down the risk/benefit analysis so clearly. It really helps to understand that this is about building a defensible position rather than finding the perfect number.

When approaching agents about a CMA for tax basis purposes, I'd recommend being completely transparent. Most experienced agents understand estate and inheritance situations and are familiar with providing valuations for tax purposes. You can say something like: "I inherited a property and need to establish its fair market value as of the date of death for tax basis purposes. Would you be able to provide a comparative market analysis dated to [specific date]?" For comparable sales data, you'll want to capture key details that affect value: square footage, lot size, number of bedrooms/bathrooms, age of property, and any major condition differences (recent renovations, known issues, etc.). Also note the proximity to your property - ideally within a half-mile radius or the same subdivision. The sale date is crucial - you want sales within 3-6 months of the death date, with preference for closer dates. Document any adjustments the agent makes for differences between your property and the comps. For example, if a comparable had a recently updated kitchen and yours doesn't, that adjustment should be noted. This level of detail shows you're taking a methodical approach to valuation rather than just picking convenient numbers. Most agents will appreciate your thoroughness and professionalism in handling an inherited property situation properly.

This is really helpful to hear from someone who actually went through the process! Your comprehensive documentation approach sounds like exactly the right balance I'm looking for. I'm curious about a couple of specifics from your experience: When you gathered sales data for the 5 comparable properties, did you do that research yourself or did the realtor include that in the CMA? I'm wondering if I should be doing my own independent research to supplement what the agent provides, or if a thorough CMA would cover that base. Also, you mentioned your tax preparer called it a "defensible position" - did they give you any sense of what would have made it even stronger, or did they feel confident it would hold up if questioned? I'm trying to gauge whether this approach truly puts me in a safe zone or if it's more of a calculated risk. The point about ongoing scrutiny through rental property returns is really important - I hadn't fully considered that this basis number will show up repeatedly over the years, not just when I eventually sell. That definitely reinforces the value of getting the documentation right from the start.