How Do I Know When I Need a Written Appraisal?
It’s always fun to discover that something you own is worth far more than you paid for it. Or that the old sculpture that your grandparents purchased on their wedding trip to Europe was made by someone famous and may be worth a considerable amount. A consultation by a professional appraiser can help you decide if you should have a written appraisal. Written appraisals are not always necessary but there are instances when they are not only desirable but required. Three instances where you need written appraisals are for estate taxation, insurance coverage and to substantiate tax deductions for donated property.
Estate Taxes are levied by the states and Federal government on estates above certain values. The estate must be able to provide values for major possessions such as furniture, fine art, antiques, etc. to the taxing authorities. Ideally, since individual estates may face taxation, proper estate planning should consider the value of personal property. Once an individual has this important information, he can decide what to do with collections or individual possessions. Information can help make informed decisions about future distribution of property.
Insurance coverage is generally limited for individual items in homeowner’s insurance. Property valued above these limits particularly art, jewelry and antiques must have written appraisals to substantiate their greater value and to schedule on a rider to the homeowner policy. Without specifically itemized values, it is likely you will recover only a portion of the current value from a claim.
Charitable donations of noncash property may be deducted from your federal income tax but the rules and requirements which govern those deductions are complex. Generally speaking, non-cash donations valued at less than $5000 do not require written appraisals. A written appraisal, made no earlier than 60 days before the date of the contribution, is required for an item or group of items valued at more than $5000. In addition, the IRS requires that the written appraisals are made by a qualified appraiser. A qualified appraiser for IRS purposes is an appraiser who holds himself out as an appraiser, is qualified by experience and professional qualifications to make appraisals of the type of property being valued, and understands the legal implications of an IRS appraisal. The IRS will exclude appraisers who have a current or future interest in the property, such as an heir or dealer who wishes to purchase the estate. Members of the American Society of Appraisers abide by a Code of Ethics which ensures that they have the training, experience and qualifications to act as qualified appraisers.
It’s always fun to discover that something you own is worth far more than you paid for it. Or that the old sculpture that your grandparents purchased on their wedding trip to Europe was made by someone famous and may be worth a considerable amount. A consultation by a professional appraiser can help you decide if you should have a written appraisal. Written appraisals are not always necessary but there are instances when they are not only desirable but required. Three instances where you need written appraisals are for estate taxation, insurance coverage and to substantiate tax deductions for donated property.
Estate Taxes are levied by the states and Federal government on estates above certain values. The estate must be able to provide values for major possessions such as furniture, fine art, antiques, etc. to the taxing authorities. Ideally, since individual estates may face taxation, proper estate planning should consider the value of personal property. Once an individual has this important information, he can decide what to do with collections or individual possessions. Information can help make informed decisions about future distribution of property.
Insurance coverage is generally limited for individual items in homeowner’s insurance. Property valued above these limits particularly art, jewelry and antiques must have written appraisals to substantiate their greater value and to schedule on a rider to the homeowner policy. Without specifically itemized values, it is likely you will recover only a portion of the current value from a claim.
Charitable donations of noncash property may be deducted from your federal income tax but the rules and requirements which govern those deductions are complex. Generally speaking, non-cash donations valued at less than $5000 do not require written appraisals. A written appraisal, made no earlier than 60 days before the date of the contribution, is required for an item or group of items valued at more than $5000. In addition, the IRS requires that the written appraisals are made by a qualified appraiser. A qualified appraiser for IRS purposes is an appraiser who holds himself out as an appraiser, is qualified by experience and professional qualifications to make appraisals of the type of property being valued, and understands the legal implications of an IRS appraisal. The IRS will exclude appraisers who have a current or future interest in the property, such as an heir or dealer who wishes to purchase the estate. Members of the American Society of Appraisers abide by a Code of Ethics which ensures that they have the training, experience and qualifications to act as qualified appraisers.