Appraisals
Types of Appraisals & Values
Types of Appraisals
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Insurance Appraisals protect the value of your fine art from loss due to fire, theft, or damage. Insurance appraisals provide the current Replacement Value of your fine art objects. Most insurance companies require a Fine Arts Appraisal for works of art valued in excess of $1,000. It is suggested that a professional appraisal be conducted every three to five years to determine current values for insurance purposes.
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Insurance Settlement Appraisals provide current Replacement Value or Replacement Depreciated Value (determined by insurance contract) to ascertain loss in value, possible restoration or replacement if damage occurs.
Donation and Gift Appraisals are used to determine the Fair Market Value for Federal tax deductions in conformance with Internal Revenue Service requirements (see IRS publication #526).
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Estate Appraisals are required when an artist or collector dies and provides Fair Market Value for estate tax liability, in conformace with IRS guidelines and regulations.
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Equitable Distribution Appraisals are used for estate planning and/or property distribution among heirs. The value can be Fair Market Value or Marketable Cash Value, determined by the client and/or attorney.
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Sale or Advisory Appraisals provide analysis and conclusion of Marketable Cash Value (net liquidation value).
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Fair Market Value (FMV) is defined as the price at which a property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. (Treasury Regulation Section 20.2031-1[b])
Replacement Value (RV) 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 an appropriate and relevant market.
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Marketable Cash Value (MCV) represents the anticipated net proceeds that would be yielded from the orderly sale of a property once all of the costs of sale were subtracted.