My father passed away in 11/2012 and left me his home. My attorney advised me that it was not necessary to establishing the Fair Market Value of the house until I sell it. Friends are urging me to determine the FMV now. Is it necessary to do it now and how do I determine the FMV?

“My father passed away in 11/2012 and left me his home. My attorney advised me that it was not necessary to establishing the Fair Market Value of the house until I sell it. Friends are urging me to determine the FMV now. Is it necessary to do it now and how do I determine the FMV?”============> The tax advantage that someone gets for leaving their heirs property when they die is that the tax basis for the inherited property is the value at their death, FMV, I mean OR alternate valuation date, income tax is completely avoided on the appreciation in value that occurred while they owned the property. So, your basis for inherited property from a decedent is generally one of The FMV of the property at the date of your father’s death OR The FMV on the alternate valuation date, if so elected by the personal representative for the estate.As mentioned above, the basis for inherited property is generally the FMV of the property at the date of the decedent's death, regardless of when you acquire the property.If a federal estate tax return does not have to be filed, your basis in the inherited property is its appraised value at the date of death for state inheritance or transmission taxes.

Thank you for the information you provided. I am still uncertain as to how I document what the FMV is after death for IRS. Can you provide me information how to accomplish it?

I'm not a tax professional but I believe your best bet for FMV would be to have it appraised by a certified real estate appraiser from state in which the property resides.