Choosing a "Qualified" Appraiser for the Valuation of Tangible Personal Property, Including Paintings, Jewelry, and Other Works of Art, for Estate, Income and Gift Tax Purposes
A Guest Blog By Victoria Shaw-Williamson, AAA
When choosing a “Qualified” Appraiser of Tangible Personal Property for income, estate and gift-tax purposes, a taxpayer must be in compliance of the appraisal regulations set forth by the IRS in section 170 of the Internal Revenue Code of 1986. The term “Qualified” refers to both the appraiser and the appraisal document, and is summarized in IRS publication 561, “Determining the Value of Donated Property”. For taxpayers who wish to claim a charitable deduction on their income tax return, a “qualified appraisal” is required for tangible personal property valued over $5,000. When dealing with a taxable estate, an executor filing an estate tax return is required to obtain an appraisal a collection of objects valued over $10,000, and for any individual item valued over $3,000.
The primary purpose of these regulations is to ensure that a competent appraiser is selected to issue the appraisal, and that he or she is a disinterested party with no restrictions on their ability to render an honest opinion of value. In order to be considered disinterested, the qualified appraiser must not be the donor or the donee, nor can the appraiser be a party to the transaction where the object was originally purchased.
For this reason, gallery owners, dealers and auction house employees, while highly competent, may not be considered “qualified appraisers” if the object in question was purchased from their gallery. An exception to this rule would be if the donor of the property donated the object within two months of its purchase from the gallery, and claims an appraised value that is no higher than the object’s purchase price.
According to the IRS, the best way to find an appraiser of paintings, jewelry or other works of art is to contact an art historian at a local college or museum. However, professors and curators generally do not provide appraisals for works of art, and they are likely to recommend an organization such as the Appraisers Association of America. The AAA maintains an online database of members organized by area of expertise, often with links to the appraiser’s website.
For more information:
www.irs.gov/publications/p561/index.html
Victoria Shaw-Williamson, AAA is an instructor at New York University School of Continuing and Professional Studies, where she teaches a course on personal property appraisals for the Appraisal Studies Program. Victoria is a certified member of the Appraisers Association of America, having completed her certification examination in American 18th and 19th century furniture.
Please visit www.victoriashawwilliamson.com for more information regarding her firm and its services. For art-related news and information, please visit her blog at http://theartappraisalblog.blogspot.com
