A few weeks ago I was contacted by a potential client who owned two homes in Olympic Valley, CA home of the 1960 Winter Olympics and the Squaw Valley ski resort. The client was looking for an appraiser to perform 2 appraisals and provide discount appraisals for the two properties. He went on to explain that he has 4 kids, is getting older in age, and is setting up his estate. Based on advice from the clients tax attorney he wants to gift each kid a 25% interest in each of the homes.
Due to tax laws, fractional interest shares are valued at a discounted rate based on 10 different variables. Therefore the value of each share in this scenario is discounted 30%. If you were to think of the properties as a whole with a market value of +/- $1.65M the discounted/taxable value would only be $1.15M. Thats alot of lift tickets at Squaw, not to mention it will save each of the kids thousands of dollars in estate taxes.
There are many reasons why people have their homes appraised and each scenario involves a different purpose. This was a great appraisal for me to perform as I got to help my client keep 2 homes within the family for years to come.
Please feel free to contact me anytime for information on appraisals, market information, or to get a better understanding of how an appraisal can benefit you and your family.
Best regards, Dave Westall
530-448-9882
david@aag-inc.net
Wednesday, May 27, 2009
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