.png)
Preparing for a Tax Dispute? How to Strengthen Your Position with a Solid Valuation
Tax disputes involving real estate aren’t just about numbers—they’re about documentation. Whether you’re challenging a property tax assessment, reporting estate value to the IRS, or involved in a capital gains audit, a strong appraisal can make or break your position.
But not just any appraisal will do. In high-stakes tax scenarios, the valuation needs to do more than estimate value. It needs to prove it.
So what makes an appraisal strong enough to support your case—and survive review?
Let’s walk through it.
The report needs to speak the IRS’s language.
Tax authorities aren’t interested in rough estimates, CMAs, or unverified opinions. They want appraisals that follow accepted valuation standards, use credible market data, and clearly explain how the conclusions were reached.
That means:
- A fully USPAP-compliant report
- A clearly defined valuation date (especially important for estate or gift tax filings)
- Transparent adjustments, backed by comparable data
- A step-by-step narrative explaining the process, not just the outcome
A good appraisal anticipates the questions an IRS reviewer (or county assessor) might ask—and answers them in advance.
The valuation date is everything.
In tax work, timing isn’t just important—it’s foundational.
For estate taxes, the report must reflect the property’s value on the date of death or, if elected, six months after. For capital gains, it may need to reflect the basis at the time of acquisition or inheritance. For property tax disputes, the valuation date often precedes the actual appeal by many months.
An appraisal that reflects the wrong timeline can lead to rejected filings, recalculated liabilities, or—in some cases—penalties.
If you’re unsure which date to use, a qualified appraiser can work in coordination with your CPA or attorney to make sure it’s done right.
Support beats assumptions—every time.
In a tax setting, the appraiser isn’t just presenting a number. They’re defending it.
That’s why every adjustment needs to be backed by evidence. Market conditions, comparable sales, concessions, and even deferred maintenance need to be addressed directly—because if they aren’t, the opposing side will.
The more detailed the support, the harder it is to challenge.
At Bernhardt Appraisal, we often work with attorneys and accountants on appraisal reviews—evaluating the strength of another report. And time and again, the appraisals that fall apart are the ones that skip steps, make assumptions, or leave questions unanswered.
A strong appraisal brings leverage.
If you’re involved in a property tax appeal, a well-documented appraisal gives you negotiating power. It provides a factual foundation for why the current assessment is inflated—and creates pressure for a more reasonable resolution.
If you’re under IRS review, it shows that your valuation wasn’t arbitrary. It was built on professional standards, local market data, and a neutral process.
In both cases, it positions you as proactive, not reactive. And that makes a difference.
Don’t wait until you're under pressure.
One of the most common mistakes we see is waiting too long to order an appraisal. By the time an appeal window is closing or the IRS has asked for more information, the timeline may be tight—and the risks higher.
If you suspect that real estate value will become a point of contention, it’s worth having a defensible appraisal in hand early. Not only does it help shape your strategy—it helps you avoid surprises.
At Bernhardt Appraisal, we’ve supported clients through tax disputes at every level. We understand what these situations require. And we don’t just provide value—we document it, support it, and explain it clearly.
Because when the stakes are high, clarity isn’t a luxury. It’s your best asset.
