Why do I need an appraisal?

Appraisals can be required for a variety of purposes including: donation, insurance, and fair market value.  Please see our available services for detailed explanations of each.

What information is required for an appraisal?

When contacting us, please be prepared to provide as much information as possible about the creator of the works and of the physical material to be appraised including:  Number of Pieces; Condition and Location of Works; Purpose of the Appraisal; and any available cataloguing.

How long will the appraisal take?

An appraisal will typically take 30 to 45 days to complete from the date of inspection.

What happens during the appraisal process?

After you contact us and provide the required information, we will send you an appraisal agreement including a schedule for completion and a request for a retainer.  Upon receipt of your signed agreement and retainer we will arrange an inspection of the work(s).  Once all requested documents are received, the appraisal will be completed according to schedule and a final invoice will be sent if further monies are required.  Appraisals are delivered within 24 hours of our receiving the final payment.

When must I donate my work(s) to be eligible for an income tax receipt?

To be eligible for an income tax receipt for the current calendar year, a donation must be made prior to December 31st of that year. We can still prepare an appraisal after December 31st as long as the material was donated to the institution and a Deed of Gift was issued on or before December 31st.

What is "Fair" Market Value?

Fair Market Value is a legal term synonymous with Market Value.

How is Market Value defined?

The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

What are the various types of values used in appraisals and when is each used?
  1. Fair Market Value, the most commonly used value approach, is the price at which the property would change hands (in the market where the property is commonly sold) between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.  Fair market value is used for donation, archive, and estate appraisals.
  2. Market Value is based on the same assumptions as fair market value with the exception that there is an assumption of sale within a specified time period and possibly a specific market in which the property will sell.  Market value would be used in cases of some estate appraisals as well as equitable distribution appraisals.
  3. Marketable Cash Value, also known as Equitable Cash Value, represents the net proceeds to be expected from the sale of property to the seller and can be the based on either fair market value or market value types of sales.  Marketable cash value can also take into consideration expenses such as insurance, advertising, shipping, etc. that may be involved in the sale. This type of value might be requested in the case of liquidation appraisals.
  4. Replacement Value is the price in terms of cash or other precisely revealed terms that would be required to replace a property with another of similar age, quality, origin, appearance, and condition within a reasonable length of time in the appropriate market. This type of value is used for insurance appraisals and is usually based on retail values of the same or comparable properties. 
  5. Liquidation Value is the probable price in terms of cash or other precisely revealed terms for which the property would change hands is sold either in an orderly manner with some limited conditions (Orderly Liquidation Value) or sold immediately without regard to the most relevant market place (Forced Liquidation Value).
  6. The Comparative Market Data Approach to value involves the compilation of appropriate comparables and the analysis of these comparables as well as the determination of the most appropriate market place.
  7. The Cost Approach to value is based on the cost to replace a property with an equivalent substitute that is new, using modern materials, techniques, and standards that satisfies the description of the replaced property.  This valuation method is sometimes used in large archives or estates for negatives or study material.
  8. The Income Approach to value is based on the expected income stream from a body of work, either through reproduction, or usage, fees paid for the images or future printings from the negatives.  This approach takes into consideration a present value calculation.
  9. Adjusted Market Data Approach to value takes past auction or retail sales and increases them to present day values based on an adjusted rate of inflation.
What are the different kinds of appraisal reports and what do they include?
  1. Self-Contained Appraisal Reports are the most complete kind of appraisal reports and include detailed descriptions and valuations.  They adhere to the Uniform Standards of Appraisal Practice (USPAP) rules 2-2 and 8-2, as should any appraisal report.
  2. Summary Appraisal Reports are the next most complete appraisal reports.  They differ from self-contained reports in that they summarize the descriptive and evaluative sections of the appraisal.
  3. Restricted Use Appraisal Reports merely state certain information, such as evaluations and property identity.   More detailed notes are kept in the appraiser’s files, rather than reported in the document.  This type of appraisal report prominent states the exclusion of certain information and restricts the use of the appraisal to the client only.
  4. Complete Appraisals include an opinion of value developed without invoking the USPAP Departure Rules (meaning that no permitted deviation from standard appraisal practices has been used).
  5. Limited Appraisals include an opinion of value developed under and resulting from invoking the Departure Rule.
What is USPAP?

USPAP is the Uniform Standards of Professional Appraisal Practice. As developed by the Appraisal Standards Board of The Appraisal Foundation, they are a set of Congressionaly recognized appraisal standards.  Although not required by the IRS, or by many insurance carriers, all practicing appraisers are strongly advised to be USPAP certified every five years by taking a 15 hour course and exam. (IRS looks favorably upon appraisals prepared by USPAP-certified appraisers.)

For additional information about the Appraisal Foundation and USPAP please click here

What is the IRS Art Advisory Panel?

The Internal Revenue Service (IRS) has an art advisory panel that examines the fair market value of the taxpayer’s claimed art in estate, gift and federal income tax cases.  The IRS also advises on what type of art appraiser they consider.   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers.