Gift Tax Appraisals in Fort Worth: Form 709 and Adequate Disclosure

Most families transferring real estate today owe no gift tax. The 2026 basic exclusion is $15,000,000 per individual and the annual exclusion is $19,000 per recipient. That leads people to assume the appraisal is optional. It is the opposite — the appraisal is what makes the disclosure adequate, and adequate disclosure is what limits how long the IRS has to come back.

Those exclusion figures are your CPA's department, not mine. What I am responsible for is a report that satisfies the substantiation rules on its own terms.

Why the appraisal matters when no tax is due

Treasury Regulation §301.6501(c)-1(f) sets out what a gift tax return must contain for a transfer to be adequately disclosed. If the gift is adequately disclosed, the IRS generally has three years to challenge the value. If it is not, the limitations period never begins — and the value of that gift can be revisited at any time, including decades later when it is pulled back into the estate calculation and the people who could explain it are gone.

That is the whole argument for spending money on an appraisal in a year when the exclusion means nobody writes a check. You are not buying a lower number. You are buying finality.

What the regulation requires of the appraiser

Paragraph (f)(3) allows the detailed description of valuation method to be satisfied by an appraisal, provided the appraisal meets specified conditions. The appraiser must hold themselves out to the public as an appraiser or perform appraisals on a regular basis, must be qualified to appraise the type of property at issue, and — this is the part people trip over — must not be the donor, the donee, a member of the family of either, or an employee of any of them.

A federal regulation describing my independence as a condition of the filing is unusual, and it is worth saying plainly: the reason to hire someone outside the family is not caution. It is the rule.

The appraisal itself must state the date of the transfer, the date the appraisal was performed and its purpose, a description of the property, the appraisal procedures followed, the assumptions and limiting conditions, and the specific basis for the valuation — including comparable sales and the reasoning behind the adjustments.

The effective date is the date of the gift

Not today, and not the date I inspect. If the deed was signed in March and you call me in November, the assignment is retrospective: I develop an opinion of value as of the March date, using data available as of that date. That is ordinary work and it does not cost more, but it does require the date to be right, so send me the recorded deed rather than your recollection of it.

Selling to family below market is also a gift

Under Treas. Reg. §25.2512-8, a transfer for less than adequate and full consideration in money or money's worth is a gift to the extent of the difference. The regulation is explicit that consideration is measured in money or money's worth, and that love and affection are not consideration.

So a parent who sells a $400,000 house to a child for $250,000 has made a $150,000 gift, whether or not anyone in the transaction thought of it that way. The appraisal establishes the market value side of that arithmetic. I have written about how this plays out in practice in selling a house to family below market value.

Where my scope ends

If you are gifting an undivided fractional interest, or an interest in an entity that holds the real estate, I appraise the underlying real property. Any discount for lack of control or lack of marketability is a business valuation question and belongs to a valuation analyst, not to me. I will say so before the engagement rather than after, and I am happy to appraise the real property so that the analyst has a supportable figure to work from.

Practice is limited to one-to-four unit residential property and residential land. Assignments outside that scope are declined or referred.

Timing

Form 709 is generally due April 15 of the year following the gift. An extension of the income tax return extends it; Form 8892 covers the case where no income tax extension is filed. Those deadlines are your CPA's to manage, but they set my calendar — tell me the filing date when you engage me and I will tell you honestly whether I can meet it. If I cannot, I would rather decline than deliver something rushed into a filing that has to stand for three years.

Scope, fee and process

Send the property address, the date of the gift, and who is filing. I confirm the scope, quote a fixed fee in writing, and give you a delivery date before any work starts. The fee does not change based on the value I conclude, and it is never contingent on anything — a contingent fee would disqualify the report and, more to the point, it is prohibited.

Standard turnaround is 5–7 business days from inspection. Complex properties take longer and are priced accordingly, and you will have that number before you commit.