Here are some examples:
Maybe you don’t even consider yourself an art collector, but over the years you and your spouse have purchased numerous prints, drawings, ceramics, and a few paintings from local galleries as well as when you travel. One day you might realize that all of this has added up and, you wonder if you have enough insurance? Perhaps you don’t even know what some of it is worth these days?
An insurance appraisal is an evaluation of your property to determine the “retail replacement value” which is usually named in your insurance policy. It is defined as “the amount it would cost to replace an item with one of similar and like quality, purchased in the most appropriate marketplace, within a limited period of time.” In the event of loss, your appraisal can verify that the quality of the replacement is similar to the item to be replaced.
Donations and Gifts
Maybe you’d like to make a charitable donation of a painting to a Museum, or give a piece of pottery or a vintage photograph to a family member or friend? How does that affect your tax return?
In order for you to receive the appropriate tax deduction, the IRS requires taxpayers to submit a qualified appraisal of “fair market value” for any charitable donation of an object valued at over $5,000. The value is higher ($10,000) for gift or estate tax purposes. An appraisal can also help you to decide if you want to make your donation all at once, or in stages.
Divorce or Estate Planning
If you need to divide or sell your property, how do you know what it is worth and how do you identify the best market?
An appraisal of “marketable cash value” helps you to understand what your property is worth so it can be divided or sold in the most appropriate way. This type of appraisal is also helpful in dividing businesses and other jointly owned property.
What is my painting worth?
Maybe you just want to know the current value of your property?
A “fair market value” appraisal can help you decide whether to hold onto something, to sell it, or to give it away in favor of a tax deduction.