 What exactly is a fine art appraisal?
The ISA (INTERNATIONAL SOCIETY OF APPRAISERS) defines an appraisal
as the “act or process of developing an opinion
of value, cost, or present worth of forecasted earnings.” An
appraisal report is the written documentation of
this process. For fine art appraisal purposes it is typically
a written report which documents the value or replacement
cost of a given work of art.
Why do I need one?
There are a multitude of reasons why an art appraisal may be
necessary. Typical requirements are for insurance, tax, investment,
liquidation, price confirmation, equitable distribution, loan
collateral, casualty loss, and many more.
The amount of insurance needed to carry in order to cover
a potential loss is typically determined by the estimated
replacement cost of the insured item. Insurance fine art appraisals
then are necessary to ensure that works of art and collections
are expertly and appropriately valued for potential claims.
For income tax deduction and estate tax liability purposes,
the Federal Government requires value to be determined by
a qualified appraiser. For individual item deductions totaling
more than $5,000 an appraisal is required. In order to make
sure the appraisal meets the standards set for IRS-a cc reputable
donation appraisals, the proper research and preparation is
critical.
Individuals may require an appraisal either to help them
make an informed purchase decision or to help determine a
fair asking price.
In fact, due to the different nature of the various appraisal
functions, the same item may have many different appraised
values. For instance, the determined value for insurance purposes
may be different than a determined value for estate tax or
charitable contribution purposes. As a qualified, educated
appraiser, Gary Fillmore understands the many different types
of values, assigned uses, and market levels. He will work
with you to choose the proper type of value so that you can
use the appraisal correctly and effectively.
How do I know if I need one?
If your art work is worth $10,000 or more, we obviously think
that paying for an appraisal to obtain insurance coverage
or to document Fair Market Value for a tax deduction would
be a wise move. On the other hand, you most likely would not
want to pay $500 to find out your artwork is worth only $250.
We are glad to provide free consultations for the purpose
of advising you on whether or not you need an appraisal and,
if so, to what extent.
How do I go about choosing an appraiser?
Interestingly enough, in spite all the legal and insurance
requirements for appraisal services, there is no government
regulation of personal property appraisers. In other words,
anyone can claim they are qualified to do personal property
appraisals. Yet in a legal or insurance claim situation the
credibility and experience of the appraiser will be a critical
factor. Choosing the wrong appraiser can be hazardous or even
disastrous to ones financial health. According to Worth Magazine,
in 2002 the IRS reviewed 469 items with an aggregate taxpayer
valuation of $100.4 million, on which total adjustments of
$46.9 million dollars were recommended. For charitable contribution
claims, an average reduction of 60% was recommended ,
while in the estate tax and gift tax category an average
valuation increase of 88% was recommended.
In order to help avoid such financial pitfalls, your best
choice is to choose an appraiser affiliated with a professional
appraisal Association such as the International Society of
Appraisers or American Society of Appraisers. Continuing education
in appraisal practices and report writing, as well as ongoing
peer review of reports and practices help assure that appraisers
who are members of these organizations maintain the highest
standards of professionalism. Gary Fillmore, owner of the
Blue Coyote Gallery, is an Associate Member of the International
Society of Appraisers.
What if I just want to find out how much my artwork is
worth. Do I need to pay for a full appraisal?
Not necessarily.
Depending on your requirements, you may not need
a written appraisal report. For a nominal fee, we can provide
consultations and oral appraisals. However it needs to be
noted that oral appraisals, including those seen on shows
like “Antiques Roadshow” or those done
at events like “Heirloom Discovery Days” are not appraisals
and should not be represented as such. They are instead “verbal
approximations of value”. Within certain guidelines, which
we comply with fully, the ISA allows for oral appraisals.
Therefore we are glad to offer this option to our
clients if it better suits their requirements.
Can you do on-line appraisals?
Yes,
with certain restrictions. On-line appraisals can
only be “restricted use” appraisals,
which means they can only be used by the client
and no third parties. In other words, they cannot be used
for insurance, tax, estate, or any other legal purpose.
They are useful however, if you just want to find out how
much your artwork is worth.
On-line Appraisals are $50 per item. Included in the appraisal
is an email evaluation of your item and a signed,
written appraisal mailed to you per Uniform Standards of Professional
Appraisal Practices (USPAP) and the ISA's Appraisal
Report Writing Standard (ARWS). Photographs are required for
all appraisals, please send them to gary@bluecoyotegallery.com along
with any questions you may have. If you have no way
of supplying us with a photo through email, you may
mail your photos to us. |
