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risk that appraised value is not correct

I am working with an attorney on an estate.  He is very cautious (or curious) and has asked me 3 times over the past 18 months about risks that the estate will pay tax. This is a simple estate. It had 2 residences sold in 2019 and both had a loss for taxes. There was a bank account.

He has asked for my opinion on the risk that the estate might owe tax. The only taxable items on these returns are losses on the houses and the interest income on the bank.  I can only think of two situations where there is risk, and this is not based on anything I am aware of relating to the estate.

1.  That the valuation of the appraised properties (residences) could be much lower than stated by the appraiser.  And, if it were proven to be so by the IRS, then there would be taxable gain and subsequently tax to the estate.   This risk is very low, in my opinion, based on my inability to find a court case (in CCH) where a professional appraisal was found to be too high.

2. That there could be unknown financial or other assets.  I have no opinion as my tax preparation engagement is not designed to uncover unreported income or fraud.

This is an exercise that is not worth the time, except that I can bill for it. 

As an aside, we filed a Form 4810 Request for Prompt Assessment over 1 year ago. It has not been recognized by the IRS yet because the first trustee passed away and the IRS has not recognized the validity of the second trustee, despite ample documentation.  

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Level 15

1. Any marketplace references, such as Zillow, Redfin, and even county sales records, timely to Real Estate held and sold, will do and should be kept on file. Right now I am working on this for a place in FL and Pinellas County has a great sales database, which I used to look at Zillow listing prices for the 6 months prior to sale date.

2. I learned a new trick recently: pull the credit report of the deceased. It might reveal something you didn't know about. I like to wait over two year ends, just in case stuff shows up late in the mail, before final distribution and closing.

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