i find that once i read a new book to my 5 yo dd that after that she's easily able to read it herself word for word. she's can do this with 2nd grade level books and higher. but that doesn't mean that's her reading level does it? i know she hasn't memorized the story but is familiar with it so i think that makes it easier for her to read it versus reading it cold. so would that maybe put her at a 1st grade level for reading?
Reading level is typically determined by what a child can read "cold." If she can read 1st grade level material that way, but not 2nd, then her level would be 1st grade. Having said that, if you're talking about longer 2nd-grade level chapter books like the Boxcar Children books (eg. 150 pages, dense text, minimal to no illustrations), and she won't attempt reading them on her own until you've read them to her but can then read them easily, I'd assume that was more an issue of confidence than ability. Shorter books at a similar level would be much easier to make predictions about text from memory.
I've never attempted to measure my kids' reading level, beyond noticing what level they enjoy reading in order to turn them onto similar books within their capabilities. (We have no library, so I often have to order things without being able to peek inside.) I think such measurements are rather over-rated.
Mountain mama to three great kids and one great grown-up
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If your daughter is like mine, she's probably going to move ahead quickly with her skills.
grateful mother to DD, 1/04, and DS, 2/08