Gift Tax Appraisal for Real Estate: What the CPA Needs When a Claremont House Changes Hands

When a Claremont house is given to a child or another family member, the CPA preparing the gift tax return usually needs a written appraisal of the house's fair market value as of the date of gift, with the method and the comparable sales shown. The Instructions for Form 709 say a gift is adequately disclosed when the return includes, among other items, either a qualified appraisal or a detailed description of the valuation method, and that any appraisal used to value real estate is attached. The appraiser supplies the value; your CPA or attorney decides how it is used. Nothing here is legal or tax advice.

What the gift return asks of the appraisal

Three IRS sources set the frame.

The value and its date. The Instructions for Form 709 (2025) say the value of a gift "is the fair market value (FMV) of the property on the date the gift is made (valuation date)." Fair market value there is "the price at which the property would change hands between a willing buyer and a willing seller, when neither is forced to buy or to sell, and when both have reasonable knowledge of all relevant facts." For real property, the instructions add that if there has been no arm's-length sale of the property itself on or before the valuation date, the comparable sales method is used, considering "differences in the date of the sale, and the size, condition, and location of the properties."

The contents. The regulation the instructions cite, 26 CFR 301.6501(c)-1(f)(3), lists what an appraisal submitted with the return contains:

1. The date of the transfer, the date the property was appraised, and the purpose of the appraisal.
2. A description of the property.
3. A description of the appraisal process employed.
4. The assumptions, hypothetical conditions and limiting conditions that affect the analysis.
5. The information considered in determining the value.
6. The appraisal procedures followed and the reasoning behind the conclusions.
7. The valuation method, its rationale, and how fair market value was determined.
8. The specific basis for the valuation, such as specific comparable sales.

The appraiser. The same regulation says the appraiser holds himself or herself out to the public as an appraiser or appraises regularly, is qualified to appraise this type of property as the report details, and is not the donor, the donee, a member of either one's family, or anyone they employ. A report prepared under USPAP, the Uniform Standards of Professional Appraisal Practice, already states most of that list.

Two dates on the first page

A gift appraisal carries two dates, and a CPA reads both. The effective date, the date the opinion of value applies to, is the date of gift, the date the gift is made, which the attorney or CPA confirms from the deed. The report date is the day the appraisal is signed. When the deed has already recorded, the report is a retrospective appraisal, an appraisal whose effective date is in the past, and the comparable sales are the ones that closed around the date of gift, not last month's.

The inspection still happens today. The condition the report describes is the condition on the date of gift, so any change since then, a new roof, a remodeled kitchen, a tenant moving out, is noted and set aside. When a fact about the earlier condition cannot be confirmed, the report may rest on an extraordinary assumption, an assumption about uncertain facts that, if false, could change the result, stated plainly so the CPA can see it.

Why Claremont houses need pocket-by-pocket comparables

One ZIP code, 91711, holds several markets, and a gift appraisal that ignores that is hard for a reviewer to follow. The kinds of houses a family gift here can involve:

• A pre-1940 Craftsman or Spanish Colonial Revival near the Village and the Colleges. Original detail, raised foundations, enclosed porches and later additions move value differently, so comparables are chosen for era and style, not bedroom count. Gross living area, the finished space above grade, is measured, because public records on older houses often miss porches and back rooms enclosed decades ago.
• A postwar ranch north of Foothill Boulevard. Lot size, layout, garage conversions and the permit history on additions drive the adjustments.
• A hillside home in Claraboya or Padua Hills. View, grade and access set these apart, and the comparable search runs wider through the foothills with the reasoning stated.
• A townhome south of the 10. Compared with its own kind, with the HOA documents reviewed.

Claremont is on the Los Angeles County side of the county line. A sale from Upland or Montclair is used for a Claremont house only when it is genuinely better evidence, and then the location adjustment is explained. The Claremont area page sets out the pockets and the line.

Numbers that do not stand in for the appraisal

The county assessment is the taxable value under California's assessment rules, and it is not an appraisal. The gift tax regulation, 26 CFR 25.2512-1, says property "shall not be returned at the value at which it is assessed for local tax purposes unless that value represents the fair market value thereof on the date of the gift." An agent's CMA, an opinion of likely list price, is not an appraisal, and an automated estimate is not one either. None shows a method, a date and specific comparable sales.

Situations the CPA scopes before the engagement

• Part gift, part sale. When a family member pays something toward the house, the appraisal still states market value only. What the difference means for the return is the CPA's work.
• A share of the house, or a house held in an LLC. A residential appraiser values the real property. Valuing a fractional share or an entity interest, and any discount applied to one, is a business appraiser's assignment; the real property appraisal can be one input to it.
• A life estate kept by the parent. The parent keeps the right to live in the house and gives the remainder interest, the right to own the property after the life estate ends. The Form 709 instructions say those interests are generally valued at present value on the date of gift; the appraiser supplies the property's market value and the CPA computes the interest.
• A family home also crossing a Prop 19 question. The reassessment question goes to the county assessor, not the IRS. The Prop 19 parent-child decision sheet lays out who decides what.

A gift to a charity rather than to family follows different rules, set out in the qualified appraisal behind a Form 8283.

What to send

• The address and the deed, recorded or draft, with the date of gift the CPA or attorney has set.
• The intended use, what the report will be used for, and the intended users, the people entitled to rely on it: usually the donor and the CPA.
• Permits and final sign-offs for additions, garage conversions and ADUs.
• Any photographs from around the date of gift, if the gift is already past.

The appraiser is independent of the donor, the family and the CPA, including whoever pays. The fee is set by the scope of the assignment and quoted before work begins, and it does not depend on the value. The inspection takes 30 to 60 minutes for a standard single-family home, longer for hillside, custom, multi-family or homes with additions.

Next step

CPAs and estate planning attorneys can see how tax-purpose reports are set up on appraisals for attorneys, CPAs and fiduciaries, or call (909) 324-6122 with the address and the date of gift. The full list of what CPAs ask for is in appraisals for gift, donation and tax filings, and the gift, charitable and tax-purpose appraisals hub collects the series.

Sources

• IRS, Instructions for Form 709 (2025), accessed November 6, 2026
• 26 CFR 301.6501(c)-1, adequate disclosure and submission of appraisals, accessed November 6, 2026
• 26 CFR 25.2512-1, Valuation of property; in general, accessed November 6, 2026
• The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice (USPAP), accessed November 6, 2026

Gordon Hall, California Certified Residential Real Estate Appraiser, BREA No. AR003877 (lookup: https://www2.brea.ca.gov/breasearch/faces/party/view.xhtml?id=23601). Reports are prepared in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP). Nothing here is legal or tax advice; admissibility is always the court's decision.