Settling an estate is the process of finalizing all legal requirements and closing the estate account, including paying debts, meeting tax obligations and distributing assets, after we lose a loved one. This can be a very stressful and emotional process. In this article, we outline key information that you should be aware of if you have to settle an estate settlement so that it goes as smoothly as possible. We work with estate executors, trustees, attorneys and fiduciary advisors and meet the requirements established by the IRS for Qualified Appraisals and a Qualified Appraiser.
Generally when a person dies, their property becomes part of their estate for U.S. federal tax purposes. The estate is subject to tax, only if it is exceeds a certain threshold (at the time of writing, in 2026, it is $15 million per person). However, some states have lower exemptions, so you need to check what the exemption is in the state in which the property is located.
You may need to get an appraisal to determine the value of the estate to help settle the estate, calculate taxes, distribute property and assets among beneficiaries and heirs, and establish a cost basis. The IRS requires that the decedent’s gross estate be valued at Fair Market Value (FMV). FMV is not the same as market value.
FMV is defined in 26 CFR §1.170A-1(c)(2) as “the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” 26 CFR §20.2031-1(b) expands upon this definition with “the fair market value of a particular item of property… is not to be determined by a forced sale. Nor is the fair market value of an item to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate.” The tax court in Anselmo v. Commissioner held that there should be no distinction between the definition of Fair Market Value for different tax uses.
At Acanthus, in addition to appraisals, we offer consultation services where we can help you review the contents of the estate, identify items of value and recommend how to best liquidate them.