Updated: October 26, 2026 · By Mark Dietel, Broker/Owner, Mark Dietel Realty · 7-minute read
Quick answer: Indiana law does not require a date-of-death appraisal to sell an inherited house, and Indiana has no inheritance tax for deaths after 2012, but the value sets your federal basis. Order one when heirs disagree, the estate is large or years have passed; otherwise a dated market analysis from Mark Dietel Realty may do if your CPA agrees.
What we analyzed: Indiana Code 6-4.1-1-0.5 (inheritance tax repeal), IRS Publications 551 and 523, and the Indiana Professional Licensing Agency license lookup, as of October 2026.
Key takeaways
- The IRS sets an heir's basis at fair market value on the date of death (IRS Publication 551, December 2025).
- No Indiana statute forces heirs to order an appraisal before a sale, and Indiana does not tax the inheritance itself (IC 6-4.1-1-0.5), so the value matters for federal basis.
- A retrospective appraisal can be done months later, with the date of death as its effective date.
- County assessed value and online estimates are not a substitute for a dated, supportable value.
This is a spoke of our main guide, how selling an inherited house works for taxes in Indiana. This one answers a follow-up heirs in Greenwood and Franklin often ask: do we actually need to pay for an appraisal, and when?
Why does the date-of-death value matter?
In Indiana, the value has one main job: it becomes your starting point for measuring gain, because the state no longer taxes the inheritance itself. IRS Publication 551 says the basis of inherited property is generally its fair market value on the date of death. Sell for more than that value, after selling expenses and improvements, and the difference is taxable. A well-supported value protects you if the IRS ever asks how you got your number.
The value also matters inside the family. It can set the price when one heir keeps the house, which we cover in can one heir buy out the others on an inherited Indiana home. And if the estate is large enough to file Form 706, the same value feeds the estate tax return and, through Form 8971, the heirs' basis.
Two Indiana details shape the evidence. County assessed values are set as of Indiana's annual assessment date for property tax, not the date of death. And any appraiser you hire should hold an Indiana license you can confirm with the Indiana Professional Licensing Agency.
Want this applied to your own house? Call Mark Dietel Realty at (317) 426-9911, or use the request button further down this page.
Appraisal, market analysis or assessed value — which should you use?
In our read, a licensed appraisal is the strongest evidence of date-of-death value. A detailed comparative market analysis from a local agent can be enough for many modest estates if your CPA accepts it. County assessed values and online estimates are weak evidence because they are not tied to the date of death or the home's actual condition.
Appraisal, market analysis or assessed value — which should you use?
| Method | Who prepares it | Tied to the date of death? | Good for |
|---|---|---|---|
| Retrospective appraisal | Indiana licensed or certified appraiser | Yes, as its effective date | Tax basis files, estates filing Form 706, heir buyouts |
| Comparative market analysis (CMA) | Local real estate broker | Can be, if prepared with sales near that date | Pricing the listing; supporting basis when a CPA agrees |
| County assessed value | County assessor | No; set as of the annual assessment date | Property tax only |
| Online estimate | Automated model | No | A rough starting point, not documentation |
In our experience, the more money or family tension involved, the stronger the documentation should be.
How does a retrospective appraisal work?
An appraiser inspects the home today but values it as of an earlier effective date, the date of death. They use comparable sales from around that date and describe the home's condition at that time. Photos, repair records and a family description of the house as it was help the appraiser get it right.
From our experience with estate sales on the Southside, a few habits help. Take dated photos before you clean out, paint or replace carpet, because condition at death is what gets valued. Tell the appraiser the report is for tax basis, so it uses the right effective date. Keep the report in the estate file, since your CPA will want it with the closing statement and Form 1099-S.
What does this look like in Central Indiana?
Take a hypothetical Franklin ranch. The owner dies in March 2026, and the house needs a roof and new flooring. The heirs clean it out, replace the roof, and list it in September. An appraisal dated to March values the house as it was: older roof, worn floors.
That value might be lower than the September list price, and that is fine. The new roof generally adds to the heirs' basis as an improvement, so it is not taxed twice. If the heirs had instead used a September estimate for a house with a new roof as their date-of-death value, the number would be hard to defend.
In our experience, comparable sales from the date of death can differ from today's, which is one more reason the effective date matters.
When this doesn't apply
A date-of-death value is less important when the house was a gift before death, because the heir usually keeps the giver's original basis instead of a step-up. It also matters less when a surviving spouse will live there for years, or when a Form 706 already reports a value the heirs must use.
Whether your estate needs a formal appraisal is a call for your CPA or estate attorney, not for us.
What to do next
If you are handling an estate in Greenwood, Franklin, Southside Indianapolis or Bloomington, start by writing down the date of death and taking photos of the house as it is. Then ask for a written market analysis tied to that date and talk with your CPA about whether an appraisal is worth ordering.
Mark Dietel Realty can prepare a market analysis tied to the date of death and a written net sheet for the sale.
Prefer to talk? Call (317) 426-9911. Mark Dietel Realty has offices in Southside Indianapolis, Greenwood and Bloomington.
Read next
- How Does Selling an Inherited House Work for Taxes in Indiana?
- Can One Heir Buy Out the Others on an Inherited Indiana Home?
- Inherited a House in Indiana? What to Know Before You Sell
Frequently asked questions
Can I get a date-of-death appraisal after the house is already sold?
Often yes. An appraiser can prepare a retrospective report after the sale, using comparable sales from around the date of death. It is harder, because the appraiser cannot inspect the home in its original condition. Photos, listing records and your description help. Ordering the appraisal before you list is simpler and usually more convincing.
Is the county assessed value good enough for the IRS?
Usually not on its own. Indiana assessed values are set for property tax purposes as of an annual assessment date and follow mass-appraisal methods, so they may not reflect the home's actual condition or market on the date of death. Treat the assessment as one data point and rely on an appraisal or market analysis.
Who pays for the date-of-death appraisal?
It is usually paid from estate funds, or by the heirs together if the house passed outside probate. Appraisal charges vary by appraiser, property type and how far back the effective date is. Ask for a written quote. Your estate attorney can tell you whether the cost is an estate administration expense.
What if the heirs disagree about the value?
A neutral, licensed appraisal is the usual tie-breaker. Some families agree in writing in advance to accept one appraiser's number, or to average two. If the disagreement is about whether to sell at all, bring in the estate attorney before ordering anything.
This is general information, not legal, tax or appraisal advice. Confirm your situation with the Johnson County or Marion County Assessor, a CPA or an attorney.
Mark Dietel Realty — offices in Indianapolis (Southside), Greenwood and Bloomington, Indiana.
Sources
- IRS Publication 551, Basis of Assets (Rev. December 2025): https://www.irs.gov/publications/p551
- IRS Publication 523, Selling Your Home (2025): https://www.irs.gov/publications/p523
- Indiana Code 6-4.1-1-0.5 (inheritance tax, deaths after 2012): https://law.justia.com/codes/indiana/title-6/article-4-1/chapter-1/section-6-4-1-1-0-5/
- Indiana Professional Licensing Agency, license lookup: https://mylicense.in.gov/everification/
