Equipment appraisal for estate tax and probate
For estate tax and probate, business machinery and equipment is valued at fair market value as of the date of death, or as of the alternate valuation date six months later if the executor elects it, by an appraiser with no stake in the estate.
Lukes & Lukes is an independent Machinery & Equipment (M&E) appraisal firm; every report is USPAP-compliant, prepared by a NEBB-certified Machinery & Equipment Appraiser (CMEA), and documented so the executor, the heirs, the IRS and the court can rely on the figure. Equipment in a shop, practice, farm or plant often needs this appraisal on its own, to support the tax filing, an equitable division among heirs, or a sale.
By Jared Lukes · CEO & lead appraiserUpdated
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Why does estate equipment need an appraisal?
The estate tax return, the probate inventory, the division among heirs and the heirs' tax basis all start from the value of the equipment as of a fixed date. When the estate includes a business that runs on equipment, the machinery is often appraised on its own, apart from the business. Under Internal Revenue Code §1014, property acquired from a decedent generally takes a basis equal to its fair market value at the date of death, or at the alternate valuation date when that is elected. The same appraisal supports a sale if the estate chooses to liquidate. A family estimate or a dealer's figure does not carry that weight.
| Element | Estate and probate standard | What it means in the report |
|---|---|---|
| Premise of value | Fair market value | The price between a willing buyer and a willing seller, neither under compulsion, both reasonably informed |
| Valuation date | Date of death, or the alternate valuation date six months later if elected (IRC §2032) | Fixed at the outset; value is developed as of that date and stated plainly |
| Appraiser | Independent, with no interest in the outcome, working under USPAP | Assets verified and the reasoning documented item by item |
| Documentation | The standard a tax authority and a court expect | Scope, methodology, an itemized appendix and support for the conclusion |
| Roles | Appraiser prepares the M&E appraisal | The attorney and CPA handle the legal and tax treatment of the estate |
What valuation date does an estate equipment appraisal use?
An estate equipment appraisal uses the date of death, unless the executor elects the alternate valuation date under Internal Revenue Code §2032. The alternate date is six months after death. Property sold, distributed or otherwise disposed of within those six months is valued as of the date it left the estate. The election is allowed only if it lowers both the value of the gross estate and the estate tax. The appraisal states its effective date plainly, and the same equipment can carry a different value on a different date.
What is fair market value for estate tax purposes?
For estate tax, fair market value is defined in Treasury Regulation §20.2031-1(b) as "the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts." The same regulation states that value is not to be determined by a forced sale price, so an auction-day liquidation figure is not the estate value. The appraisal is prepared to the documentation standard a tax authority and a court expect to see: scope, methodology, an itemized appendix and support for the conclusion. We prepare the M&E appraisal; your attorney and CPA handle the legal and tax treatment of the estate.
Does an estate below the federal estate tax exemption still need an equipment appraisal?
Often, yes. For decedents dying in 2026 the federal basic exclusion amount is $15,000,000 (IRS). An estate below that line still needs values for the probate inventory, an equitable division among heirs, a buyout between family members, a sale, and the heirs' basis under §1014. Your attorney and CPA decide what the estate files.
Who orders an estate equipment appraisal, and what makes it hold up?
Executors, estate attorneys and accountants order estate equipment appraisals, and sometimes an heir who wants an independent value. What makes the report defensible is an appraiser with no interest in the outcome, working under USPAP, who verifies the assets and documents the reasoning item by item. We coordinate with counsel and the estate's accountant, prepare the file to withstand review, and never quote a value sight-unseen.
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Common questions
Answers, up front.
What value is used for equipment in an estate?
Generally fair market value, as of a specific date, usually the date of death or an alternate valuation date. The appraisal is documented to the standard the IRS and a court expect. Your attorney and CPA handle the tax and legal treatment; we provide the independent M&E value.
Why does the valuation date matter for probate?
Value is always as of a date. Estates use the date of death, or the alternate valuation date six months later when the executor elects it and the election lowers both the gross estate and the tax. Markets move, so the same equipment can be worth a different amount on each date. The date is fixed before the appraisal starts.
Who can rely on the appraisal?
An independent, USPAP-compliant report is built to be relied on by the executor, heirs, counsel, the CPA, the court and the IRS. Independence is the point: the appraiser has no stake in the estate, so the conclusion reads as objective.