Value as of a date in the past for estate settlement is:
Correct Answer
D) A retrospective appraisal with a defined effective date
Why this is correct: A retrospective appraisal estimates value as of a past effective date. It is permitted and common for purposes like estate settlement, divorce, or tax appeals. The analysis must use data known or knowable as of that past date. Why the other choices are wrong: 'An extraordinary assumption about the past' is wrong; an extraordinary assumption deals with uncertain future conditions, not a past valuation date. 'Prohibited unless the subject property still exists today' is wrong; retrospective appraisals are allowed even if the property has changed, but the analysis is as of the past date. 'Permitted only within one year of the date' is wrong; there is no USPAP time limit for how far back a retrospective date can be. Exam tip: Retrospective = value as of a date in the past. Prospective = value as of a date in the future.
Why This Is the Correct Answer
Why this is correct: A retrospective appraisal estimates value as of a past effective date. It is permitted and common for purposes like estate settlement, divorce, or tax appeals. The analysis must use data known or knowable as of that past date. Why the other choices are wrong: 'An extraordinary assumption about the past' is wrong; an extraordinary assumption deals with uncertain future conditions, not a past valuation date. 'Prohibited unless the subject property still exists today' is wrong; retrospective appraisals are allowed even if the property has changed, but the analysis is as of the past date. 'Permitted only within one year of the date' is wrong; there is no USPAP time limit for how far back a retrospective date can be. Exam tip: Retrospective = value as of a date in the past. Prospective = value as of a date in the future.
More USPAP Questions
Which type of appraisal report may contain the appraiser's analyses, opinions, and conclusions but is intended for use by the client only?
How long must an appraiser retain the workfile for an appraisal assignment under USPAP?
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Under Standard 1, when developing a real property appraisal, an appraiser must:
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In developing a scope of work, an appraiser must consider all of the following factors EXCEPT:
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In the assignment conditions, 'intended use' refers to:
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An appraiser is developing an appraisal for a bank loan and discovers that the property has environmental contamination that significantly affects value, but the lender specifically requests that this issue not be mentioned in the report. According to USPAP, the appraiser should: