A gift tax appraisal establishes the fair market value of real estate you give away during your lifetime, so the gift can be reported correctly to the IRS. If you gift Bay Area property to a family member, the IRS expects a documented value as of the date of the gift, and a certified appraisal is the standard way to provide it. I prepare IRS and USPAP-compliant gift tax appraisals throughout Marin, San Francisco, and the greater Bay Area, including retrospective valuations for gifts made in prior years.
When do you need a gift tax appraisal?
You need one any time a gift of real estate must be reported on a federal gift tax return. For 2026, gifts above the $19,000 annual exclusion per recipient are reportable on IRS Form 709, and real property almost always exceeds that threshold.
Common situations include:
- Gifting a home, rental, or land to a child or other family member
- Adding a family member to title, which the IRS treats as a partial gift
- Selling property to family below market value, where the discount is a gift of equity
- Transferring property into certain trusts as part of estate planning
- Documenting use of the lifetime exemption, which is $15 million per person in 2026
Most people who gift property owe no tax at all. Reportable gifts simply count against the lifetime exemption. The appraisal is what makes the reported value defensible if the IRS ever asks.
What does the IRS require?
The IRS requires gifts of property to be reported at fair market value as of the date of the gift. For real estate, that means a credible, well-documented valuation, and the safest way to establish it is an appraisal by a state certified appraiser. See the IRS gift tax FAQ for the reporting rules.
A proper gift tax appraisal states the date of the gift as the effective date, uses comparable sales from that period, and is prepared to USPAP standards. Zillow estimates, agent opinions, and county assessed values do not meet that bar, and adequate disclosure on Form 709 is what starts the statute of limitations running on the gift.
Can the appraisal be done after the gift?
Yes. A retrospective appraisal values the property as of the past gift date, even if the gift happened months or years ago. This is the same discipline I use for date of death appraisals: research the market as it existed on the effective date and document the value with comparable sales from that time. Gift tax returns are due with your income tax return the year after the gift, so there is usually a window to get this done properly.
Why the value matters for the recipient too
Unlike inherited property, gifted property keeps your original cost basis. The documented fair market value still matters: it sets the reported gift amount, affects how much lifetime exemption you use, and in loss situations can determine the recipient’s basis when they sell. Families weighing gifting against inheritance should discuss the basis tradeoff with their CPA, since a stepped-up basis at death often saves more tax than gifting during life.
What a gift tax appraisal includes
- Effective date matching the date of the gift
- Full property inspection, or an exterior and records-based approach for retrospective dates
- Comparable sales analysis from the relevant time period
- A USPAP-compliant report your CPA or attorney can attach to Form 709
I handle these assignments personally. I am a CA Certified Residential Appraiser (#AR3002942) based in San Rafael, and gift and estate valuations are the core of my practice. If your situation is a straightforward current-value gift, a market value appraisal may be all you need, and I can tell you which fits before you order anything.
Gift Tax Appraisal FAQs
Do I need an appraisal to gift property to my child?
If the gift must be reported on Form 709, which is almost always the case with real estate, you need credible documentation of fair market value as of the gift date. A certified appraisal is the standard the IRS, CPAs, and attorneys expect, and it protects the reported value if the return is examined.
Is a gift tax appraisal different from a date of death appraisal?
The methodology is the same: both are fair market value appraisals with a specific effective date, often in the past. The difference is purpose. A gift tax appraisal supports Form 709 reporting during your lifetime, while a date of death appraisal supports estate administration and the stepped-up basis after a death.
Will a gift tax appraisal change my property taxes?
No. The appraisal itself has no effect on your assessed value. The transfer can, though. Gifting California real estate is generally a change in ownership that can trigger reassessment under Proposition 19, with limited parent to child relief. Talk to your CPA or attorney about reassessment before completing the gift.
