inherited cost basis

[moostachio]

I recently inherited a family farm along with a sibling, early 2012.  The farm has 3 revenue streams; a communication tower, a recreational lake, and the farm.  I know currently if we sold it there would be very little tax consequence since it has only been about 1.5 years since we inherited it.  I think the actual assessed value of it would be very tricky to determine.  In particular the recreational lake with over 100 members is very tricky to put a value on, if one were to build it today it would be big dollars, the land used for farming would be easy to value now, and in the future, lots of data available on that.  We do not plan to sell it for quite a long time, but it is very likely we will sell when we get too old to manage it.

My question is, would it be wise to have it appraised now so that the value when it was inherited would be documented?  I am concerned that if we keep it 10-15 years then sell it, of course we would know the value then, but how would someone determine what it was worth when we inherited it for tax purposes?  Does someone have personal experience with this and could offer some sage advice?  About 2 years ago I contacted an appraiser and he said it would cost about $500-$1000 to have it appraised, now that is in our possession I am thinking this might be a good idea.  It might even be wise to have several appraisals done now, it seems like the higher the appraised value at the time of inheritance the better, it would minimize the tax bite.

Appreciate the advice.

[Crash87]

I would make some sort of documented effort. If you don't get it appraised I would call a tax preparer to see what they suggest. At least get online and print the estimate from their site. You might be able to use that to come up with a value. "Land in the area has appreciated/depreciated X% since I inherited the land, so my land's value has gone up or down by the same %."

[jpdcpajd]

If an Estate Tax Return (Form 706) was filed it would have a date of death value that the IRS would says is the basis in your hands.

[moostachio]

Ok.  Thanks everyone, I will need to check if the IRS form was filed with the estate.  That would have made a lot of sense.  My sibling was the executor, and there was little communication about the whole probate process.

[sparklebunny]

It's well worth getting an appraisal now, if a 706 was not filed. It will be more expensive to have one done many years from now.