Q: Valuation for inheritance tax and buyout in Maryland for a house inherited by two siblings
My brother and I inherited our aunt's house, and I want to buy him out. We are trying to determine a value for the buyout and the estate lawyer recommended an appraiser. His appraised value came in considerably higher than the last tax assessment (by about $200k) as well as the approximate market value we received from two separate real estate agents (they estimated we could sell the house for 50-100K less than the appraiser said it was worth). The appraisal supposedly will be used for the value to base the inheritance tax on, but we feel it's unreasonably high. Do we have any recourse? How do we go about getting another appraisal, and can the new appraisal or agreed upon value replace the first appraisal for inheritance tax purposes?
A: Yes. Make a lower offer. If refused, when the house is put up for sale, bid on on it like anyone else. You may end up being the higher bidder, but don’t bid more than you think it’s worth.
A: Appraisals are often inaccurate or, more accurately, a matter of opinion. Unless you have an agreement to the contrary, get a second appraisal and see if it lands in the same place. Agree in advance that if the two appraisals are within x% of each other, you'll average the two appraisals. If they are further apart, you will get a third appraisal, and you'll take the average of the two that are closest to each other. Or, if the property is really worth that much, sell it and split it.
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