The standard you are trying to achieve is the FMV or "Fair Market Value" (i.e. what a willing buyer and a willing seller would agree upon each one knowing all relevant facts). As an appraisal is only an estimate of the FMV, it depends on the use as to what may be acceptable as FMV/.
For your sisters and yourself, if the three of agreeable, a broker's "Market Analysis" will suffice if all of you agree. If there is dissention, the most likely result is a formal, professional appraisal will be required. in extreme cases, we have seen the parties continue to squabble until 3 formal appraisals were done to eliminate the possibilities. "low-balling". Hopefully this extreme will not be required. .
As for IRS, it depends on the use. If this is a taxable estate and the appraisal is needed for the Estate Tax Return (Form 706), nothing less than an appraisal from a qualified licensed appraiser will suffice. However, if no Estate Tax is due (either no form is being sent in, or is being sent in for "Portability" purposes, generally the "Market Analysis" will suffice. Note that whatever method is used, this value will become the new cost basis for future capital gains calculations.
If your father's estate is subject to Federal Estate Tax (over 5.25 million dollars) then you would be better off having a professional appraiser than a brokers comparative market valuation. If is not subject to Federal Estate Tax then a comparative market valuation will probably due. Y
Hope this helps. If you think this post was helpful, please check the answer was a good answer tab below. Thanks. Mr. Geffen is licensed to practice law throughout the state of Texas with an office in Dallas. He is authorized to handle IRS matters throughout the United States and is licensed to practice in US Tax Court as well as The Court of Claims. This answer is provided as a public service and as a general response to a general question, it is not meant, and should not be relied upon as specific legal advice, nor does it create an attorney-client relationship.
You have gotten excellent advice from attorneys Geffen and Phillips. If estate taxes are not an issue, and evertone is in agreement. then the valuation of a broker familiar with the area and type of property is sufficient.
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