Plain-language definitions of key terms used across the Great Estates website and in estate appraisal practice.
A provision under IRC § 2032 that allows certain estates to elect to value assets as of six months after the date of death rather than on the date of death itself. Available only for federal estate tax purposes, only when the estate is subject to estate tax, and only when the election would reduce both the gross estate value and the tax liability. Requires USPAP-compliant appraisals at both the date of death and the alternative date.
See also: Full explanation →
A formal, written opinion of value prepared by a qualified, state-certified or state-licensed appraiser in accordance with USPAP. An appraisal includes a signed certification, stated scope of work, limiting conditions, and market analysis appropriate to the assignment type. For estate purposes, a USPAP-compliant appraisal is required for probate court filings and IRS estate tax reporting.
See also: Appraisal vs. BPO vs. AVM →
Assessed value is the value assigned by the county assessor for property tax purposes. It is not the same as fair market value and is not appropriate for estate valuation purposes. Appraised value (as used in estate contexts) refers to the fair market value opinion produced by a USPAP-compliant appraisal anchored to the effective date of value.
A computer-generated property value estimate based on publicly available data such as comparable sales, tax assessments, and market trends. AVMs are fast and free but cannot account for interior condition, recent improvements, or unique property characteristics. They are not USPAP-compliant and are not accepted by Colorado probate courts or the IRS for estate purposes.
See also: Get a free AVM estimate →
A market analysis prepared by a licensed real estate broker or agent using appraisal-style methodology. Sometimes referred to as a Comparative Market Analysis (CMA); the two terms describe essentially the same type of market analysis. Great Estates’ BPO includes a full interior and exterior inspection (approximately one hour, similar in scope to a full appraisal) and is more rigorous than a typical, informal BPO or CMA, with detailed comparable selection and market-supported adjustments. A BPO is not a USPAP-compliant appraisal and cannot be used for probate court filings or IRS estate tax reporting. Available at $225.
See also: Appraisal vs. BPO vs. AVM →
The original value of an asset for tax purposes, used to determine capital gains or losses upon sale. For inherited property, the cost basis is reset to the fair market value at the date of the decedent’s death; this is the “stepped-up” basis. An accurate date of death appraisal establishes this basis.
See also: Stepped-Up Basis explained →
An appraisal or other valuation where the effective date of value is anchored to the date of the decedent’s death. All market analysis, comparable sales selection, and market condition analysis reflect conditions as of that specific date. Prepared using retrospective methodology under USPAP. The standard valuation type for Colorado probate and estate tax purposes.
See also: Retrospective Appraisal, Effective Date of Value
The specific date to which an opinion of value is anchored. For date of death appraisals, the effective date is the date of the decedent’s death, not the inspection date, not the report date. All analysis in the appraisal reflects market conditions as of the effective date.
The person named in a will to administer the decedent’s estate. In Colorado, the term personal representative is used in the Colorado Probate Code and encompasses both executors (named in a will) and administrators (appointed by the court when there is no will).
See also: Personal Representative
The price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell, and both having reasonable knowledge of relevant facts, as of a specific effective date. Fair market value is the standard used by Colorado probate courts, the IRS, and the appraisal profession for estate-related property valuations.
See also: Full explanation →
An appraisal meeting specific requirements under the Internal Revenue Code for federal estate tax reporting purposes (Form 706). Requires additional scope, certifications, and qualified appraiser documentation beyond a standard USPAP appraisal. Not all date of death appraisals are IRS Qualified Appraisals. Always quoted individually at Great Estates.
The person responsible for administering a deceased person’s estate under Colorado law. May be named in the will (in which case they are also called the executor) or appointed by the probate court. Responsibilities include inventorying estate assets, paying creditors, filing required tax returns, and distributing property to heirs.
See also: Executor, Probate
The legal process by which a deceased person’s estate is administered, debts are paid, and assets are transferred to heirs or beneficiaries. In Colorado, governed by the Colorado Probate Code (Title 15, CRS). Over 90% of Colorado probates use the informal (unsupervised) track, which requires minimal court involvement.
See also: How Colorado probate works →
An appraisal where the effective date of value is in the past. All analysis reflects market conditions, comparable sales, and data as they existed on the effective date, not on the inspection date or report date. Every Great Estates date of death appraisal is prepared using retrospective methodology under USPAP Standards 1 and 2.
See also: Date of Death Valuation, Effective Date of Value
The reset of an inherited asset’s cost basis to its fair market value as of the date of the decedent’s death. This applies to all inherited real property regardless of whether the estate owes federal estate tax. When an heir later sells the property, capital gains tax is calculated from this stepped-up basis rather than from the original purchase price, which can result in significant tax savings.
See also: Full explanation with example →
The process of identifying, cataloguing, and valuing all assets held in a trust. When a trust holds real property, an appraisal is typically needed to establish the value for inventory and accounting purposes. May require both date of death valuations (for assets entering the trust at death) and current-date valuations (for ongoing trust administration).
The professional standard governing appraisal preparation in the United States, developed and maintained by The Appraisal Foundation. Colorado probate courts and the IRS require that estate property valuations be prepared under USPAP by a state-certified appraiser. A USPAP-compliant appraisal includes a signed certification, stated scope of work, effective date, intended use, intended users, limiting conditions, and analysis that can withstand legal and regulatory scrutiny.