Date-of-Death Appraisals for California Estates and Trusts
A date-of-death appraisal is an opinion of what a property was worth on the day its owner died, prepared after the fact and pinned to that date. Federal law generally uses that value as the heirs’ new income tax basis (Internal Revenue Code section 1014), and in a California probate the court’s probate referee reports it on the estate inventory. Because the appraisal looks backward, it is often called a retrospective appraisal.
Executors, successor trustees, CPAs and estate attorneys all end up needing this number, sometimes for different reasons. This page explains why the value matters, who is allowed to prepare which kind of valuation, how the probate referee fits in, and what Diamond Real Estate Group can and can’t provide. It sits within our probate and trust sales services.
Why the date-of-death value matters
One figure feeds several decisions. Getting it right early saves arguments with the IRS, the county assessor and the other heirs later.
| Purpose | What the value does | Rule behind it |
|---|---|---|
| Heirs’ income tax basis | Sets the starting point for measuring gain when the property is later sold | IRC 1014(a)(1): fair market value at the date of death |
| Surviving spouse’s half of community property | Can reset the basis of the spouse’s half too, not only the decedent’s half | IRC 1014(b)(6), if at least half the community interest is included in the decedent’s gross estate |
| Federal estate tax return | Values the real estate in the gross estate; the return’s final value then caps the heirs’ basis | IRC 1014(f); Treas. Reg. 20.2031-1 |
| Probate inventory | Records the property’s value on the Inventory and Appraisal filed with the court | Probate Code 8902: the probate referee appraises it |
| Proposition 19 decision | Shows whether a child who moves in stays under the exclusion cap or gets a partial reassessment | BOE: for a trust, the date of death is the change in ownership date |
| Dividing the estate | Gives heirs a common number for buyouts or for equalizing shares | The trust or will, and the parties’ agreement |
For estates that must file a federal estate tax return, the stakes rise. The IRS lists the basic exclusion amount at $13,990,000 for 2025 deaths and $15,000,000 for 2026 deaths. Most estates fall below that, but the basis rule in section 1014 applies whether or not a return is required.
The alternate valuation date
Section 2032 lets an executor who files an estate tax return elect to value the estate six months after death instead. The election is allowed only if it lowers both the gross estate and the estate tax, and it can’t be made on a return filed more than a year late.
Property sold or distributed within those six months is valued on the date of that sale or distribution. If a sale is likely during that window, tell the CPA before the listing goes live.
Probate referee, appraiser or broker: who can value what
California separates appraisals from opinions of value. Under Business and Professions Code section 11302, an opinion given by a real estate licensee in the ordinary course of licensed business is not an appraisal and may not be called one. The same section says the appraiser licensing law doesn’t apply to a probate referee acting under Probate Code sections 400 to 408, unless the transaction is federally related.
| Valuation | Who prepares it | Where it’s normally used | Limits |
|---|---|---|---|
| Probate referee appraisal | A referee appointed by the State Controller and designated by the court | The probate Inventory and Appraisal | Probate cases only; set fee formula |
| Retrospective appraisal | A licensed or certified appraiser | Trust administration, estate tax returns, basis records, disputes between heirs | Costs more than a broker opinion; must state the effective date |
| Broker opinion of value | A real estate broker or agent | Pricing a sale, early planning, sanity-checking other numbers | Not an appraisal; shouldn’t be presented as one |
The right choice depends on who will rely on the number. A court relies on the referee. The IRS and a contested beneficiary are more likely to expect a formal appraisal. A trustee deciding whether to list can usually start with a broker’s analysis. Our page on broker price opinions versus appraisals explains the difference in more depth.
How the probate referee works in California
In a probate case, the personal representative delivers the inventory to the probate referee the court designates, with supporting information. The referee then appraises all property other than the items the personal representative values, which is how a house in a probate estate gets its inventory value (Probate Code 8902).
- Appointment: referees come from the pool appointed by the State Controller, and a court can designate one from another county if no suitable local referee is available (section 8920).
- Fee: one-tenth of one percent of the total value the referee appraises, plus actual and necessary expenses (section 8961). The commission is at least $75 and no more than $10,000 per estate, unless the court approves more after notice (section 8963).
- Waiver: the court may waive the referee’s appraisal for good cause, on a petition that attaches a proposed inventory and appraisal and is set for hearing at least 15 days after filing (section 8903).
- Independent experts: section 8904 lets the personal representative use an outside expert only for unique, artistic, unusual or special items of tangible personal property, not for real estate.
On our arithmetic, a referee appraising a $1,200,000 house would earn a $1,200 commission on that property, plus expenses. Ask the estate’s attorney how the referee’s figure will interact with any separate appraisal the CPA wants.
Trusts: no referee, so the trustee picks the appraiser
A house held in a living trust usually never sees a probate referee. The successor trustee chooses who values it, and that choice should match how the value will be used. The Board of Equalization treats the date of death as the change in ownership date for property in a revocable trust, so the valuation date is the same for property tax and income tax purposes.
Because a trustee owes duties to every beneficiary, document how the valuation was chosen and share it. Where one beneficiary wants to buy the house, an independent appraisal protects the trustee. Our guide to selling a house held in a trust covers the trustee’s steps around it.
What a retrospective appraisal looks at
The appraisal is meant to show fair market value, which the estate tax regulations describe as the price at which property would change hands between a willing buyer and a willing seller. Neither party is under compulsion to act, and both have reasonable knowledge of the relevant facts (Treas. Reg. 20.2031-1(b)). A forced-sale price doesn’t count.
- The effective date: the date of death, stated on the report, not the date of the inspection.
- Comparable sales around that date: sales shortly before and after it, adjusted for any market shift in between.
- Condition on that date: photographs, inspection reports and repair invoices help, especially if work has been done since.
- Property-specific factors: in Sonoma, Napa and Marin these often include septic and well systems, access roads, fire and flood zones, views, unpermitted rooms and second units, and agricultural use.
Vineyards, ranches and income property need appraisers who handle those property types. Our vineyard valuation guide lists the extra data an appraiser will ask for.
If the house sells within months, expect your tax adviser to compare the appraisal with the sale price. A large gap in either direction needs an explanation in the file.
Community property and the second step-up
California is a community property state, and section 1014(b)(6) matters for married owners. When one spouse dies, the surviving spouse’s half of community property is treated as acquired from the decedent if at least half of the community interest was included in the decedent’s gross estate. In practice, the whole property may get a new basis at the first death.
Here is a hypothetical, on our arithmetic: a couple bought a Santa Rosa house for $250,000 as community property, and it’s worth $1,100,000 when the first spouse dies. If the full step-up applies, the survivor’s basis becomes $1,100,000, not $675,000 (half the old cost plus half the new value). How title was held, and what the couple’s documents say, decides whether the property is community property, so the estate attorney should confirm it. Our guide to selling a home after a spouse dies covers the sale side.
How Diamond helps, and where we stop
Diamond can prepare a broker opinion of value or a comparative market analysis for an executor, a trustee or their advisers. Either one can help price a sale, help heirs decide whether to keep, rent or sell, and show when a formal appraisal is worth ordering. Neither is an appraisal under California law, and we label them that way.
When a referee or appraiser is involved, we can give them the sales data, condition notes and access they need. If you need an appraiser, Diamond may refer you to partners we work with; you’re free to choose any provider. For a sale, our comparative market analysis guide shows how a list price is built from recent sales.
A short checklist for executors and trustees
- Record the date of death and the condition. Photograph every room and the exterior before clean-out or repairs begin.
- Find out who will rely on the value. Court, IRS, assessor, beneficiaries or a buyer each point to a different kind of valuation.
- Ask the CPA about an estate tax return. That answer decides whether the alternate valuation date is even available.
- In probate, plan around the referee. Give the referee access and any information that affects value, such as permits, defects or tenant leases.
- In a trust, order the appraisal early. Comparable sales near the date of death are easiest to gather while they are recent.
- Keep the report with the estate file. Heirs need it years later when they sell or depreciate the property.
For the broader choices heirs face, see our guides to inheriting a house in California, Proposition 19 for inherited homes and inherited rental property.
This is general information, not legal or tax advice; talk to a California estate attorney or a CPA about your situation.
Questions people ask
What is a date of death appraisal?
It’s an appraisal of a property’s fair market value as of the day the owner died, usually prepared weeks or months later. It is used to set the heirs’ income tax basis under IRC section 1014 and, where needed, for the probate inventory or an estate tax return.
Is a date of death appraisal required in California?
In probate, the probate referee appraises the real estate for the inventory unless the court waives it for good cause. In a trust administration no statute on this page requires one. Most CPAs still want a documented value to support the heirs’ basis.
Can a realtor do a date of death appraisal?
No. Under Business and Professions Code 11302, a real estate licensee can give an opinion of value but it isn’t an appraisal and can’t be called one. A broker’s opinion is useful for pricing and planning; a licensed appraiser prepares a retrospective appraisal.
How much does a probate referee charge?
The commission is one-tenth of one percent of the value the referee appraises, plus actual expenses, with a $75 minimum and a $10,000 maximum per estate unless the court allows more. On a $900,000 house, that’s $900 plus expenses.
Can the probate referee’s value be used for the step-up in basis?
The referee’s appraisal is a date-of-death value, and many estates rely on it. Whether it’s enough on its own for tax purposes is a question for your CPA, who may want a separate appraisal for complex or high-value property.
What if the house sells for much more or less than the appraisal?
Your gain or loss is generally measured from the date-of-death basis, so the difference shows up on the tax return. A large gap invites questions, so keep the appraisal, the sale records and notes on any market change or repairs in between.
If you’re settling an estate or trust that holds real estate in Sonoma, Napa, Marin or nearby counties, contact Diamond for a broker opinion of value and a plan for the sale or the hand-off to the heirs.
Sources & notes
- Cornell LII: 26 U.S. Code section 1014, basis of property acquired from a decedent
- Cornell LII: 26 U.S. Code section 2032, alternate valuation
- Cornell LII: 26 CFR 20.2031-1, definition of gross estate; valuation of property
- IRS: What’s new, estate and gift tax (basic exclusion amounts)
- California Public Law: Probate Code section 8902
- California Public Law: Probate Code section 8903
- California Public Law: Probate Code section 8904
- California Public Law: Probate Code section 8920
- California Public Law: Probate Code section 8961
- California Public Law: Probate Code section 8963
- California Public Law: Business and Professions Code section 11302
- California State Board of Equalization: Proposition 19
Last reviewed October 2026 by Matthew Martinez.
