Property Valuation
A Florida appraiser performing an appraisal for estate tax purposes uses which value standard?
AAssessed value as determined by the county property appraiser
BFair market value as defined by IRS regulations — the price at which the property would change hands between a willing buyer and seller✓ Correct
CInsured replacement value
DInvestment value specific to the estate
Explanation
For estate tax purposes, the IRS requires properties to be valued at 'fair market value' — defined as the price at which property would change hands between a willing, knowledgeable buyer and seller, neither under compulsion to buy or sell.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
1031 ExchangeA tax-deferred exchange allowing investors to sell one investment property and reinvest proceeds in a like-kind property while deferring capital gains taxes.
Math Concepts
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