Elements of a Charitable Donations Appraisal
What to look for in a professionally written appraisal done in connection with a charitable donation. Remember that the IRS requires appraisals for non-cash charitable donations when the objects is valued at more than $5,000. Appraisals may be advisable when objects are worth at least $500 as this is the threshold at which you will be required to fill out IRS Form 8283 and attach it to your return. See your tax advisor.
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Item Details
The appraisal report should include enough detail to fully identify the item or items that have been donated. This can include title, description, maker or artist, materials, size, date of manufacture or creation, and any important information about provenance. Where the items have appeared on exhibition or in publications, if any, are very helpful as well.
Valuation
Obviously the appraisal needs to include the final value determination from the appraiser. His or her reasoning should also be in the report. This section may be as short as a paragraph or two or it may be more than one page long, depending on the complexities of market, identification, comparable sales, or other relevant matters.
Appraiser Qualifications
The IRS requires appraisals done for tax purposes to be completed by "qualified" appraisers. Their definition of "qualified" includes details about training, education, and experience. These should be elaborated on in the report to help provide credibility.
Assumptions
Listing extraordinary assumptions is not required. There may be none. However, there are several common kinds of extraordinary assumptions that should be included in the report if they are present. Examples include: identity, condition, and age. Extraordinary assumptions are assumptions that must be made about the item based on incomplete information or inability to fully examine the item and which could be contrary to actual fact and which, if contrary to actual fact, could result in different value conclusions. Extraordinary assumptions do not, necessarily, mean that an appraisal cannot be relied upon and they do not render an appraisal invalid. However, they must be disclosed.
I believe in the power of objects to touch us emotionally. Whether it is because they embody precious memories or because they are tangible examples of beauty or because they allow us to tell stories that are important, man-made objects have always been and will always be an important part of our lives.
No one can place a dollar price tag on our emotions or our memories. But price can be a representation of those things. And sometimes it is important that individuals and families be able to know and understand the worth of their belongings. I provide appraisal services to meet that need. Whether you are making a charitable donation, insuring your collection, or dividing an estate, I can help. Let's talk. (814) 273-3563.