When someone dies, his or her assets (often referred to as estate) might become subject to a death tax or estate tax. The tax is imposed on the total value of the assets, which depends on the estate’s fair market value on the date the person died. 
To ensure that the tax is imposed correctly, the person (or people) inheriting the estate must hire a professional for estate valuation. The section below discusses various crucial aspects of finding the value of an estate for tax purposes. 

An Introduction to Estate Taxes     

Federal and state laws require the government to impose estate taxes according to each asset’s FMV or fair market value on the date of its owner’s death. The tax amount has nothing to do with the actual purchase price of the assets. 
The value of each asset forming the estate should be determined separately. The total value thus obtained or the “gross estate” (a term often used by experts) is regarded as the overall value of the estate at the time of its owner’s death. The assets can include bonds, stocks, real estate, businesses, and various other investments. 

Calculating tax becomes a lot easier the moment you know the gross estate. However, there are certain deductions you may be eligible for. Examples include mortgages and other debts, qualified charities, expenses for estate administration, etc. If you are a surviving spouse who has inherited the estate, you will be eligible for an additional deduction. 
Subtract each of the deductions you are eligible for from the gross estate, and you will get the value on which the tax will be calculated. 

The Ideal Dates for Valuation

When it comes to estate tax valuation, the trustee of the estate or the executor gets to choose from a couple of dates. Experienced appraisers use this regulation to reduce the taxable estate value. 

As mentioned above, the most common date of valuation is the date on which the original owner of the property has died. For retirement accounts, investments, and cash, the valuation is done based on statement values of the said date. When finding the value of stocks, you can use the average value of the stocks on that day. To find the appropriate value of the real estate and other assets on the day, you will need the assistance of an experienced appraiser. 

At times, the executor picks an alternate date for the valuation. It is six months following the date of death. If the total value of the estate decreases during these six months, you will benefit from your choice as your tax amount will also decrease. However, you must note that the law requires you to opt for an alternate valuation date for all assets. So, it would be wise to pick the valuation date only after considering the kind of assets you have inherited. 

Final Words 
The above discussion must have helped you to understand that estate tax valuation is a complex job. The process involves a series of considerations and requires in-depth knowledge of state and federal laws. So, if you want the valuation to be flawless, you must seek professional assistance. 
Read more: https://www.sigmavaluation.com/estate-gift-tax-valuation/