There are many appraisers to choose from when one needs an appraisal. Various appraisers have an expertise in everything from fine antiques to farm equipment. Some appraisers are known as generalists. These appraisers are the appraisers most often used in estate liquidations and estate probate when the estate isn’t valued higher than a million and doesn’t include any specific valuable collections. Generalists are generally used for “average household contents”. The problem with using a generalist is that they think they can appraise everything - including art. All they have to do is search the internet or go to any of the “art sites” now available online. If that were true, you could too! You could eliminate the need and cost of an appraiser.
What happens when you don’t have a qualified appraiser? Well, if you are using an appraiser to value a painting that has been in the family for generations and are considering selling it, the wrong appraiser can cost you money you would have made from the sale. If a signature is misidentified, knowledge of the artist, style or period is lacking, or specific knowledge about the art market and how the artist fits into that art market is lacking, it can make a difference between selling it for what it is truly worth and selling it for a lot less that you should have received. There are so many stories in the news of appraisers who told people their works were worth hundreds, only to be purchased by a dealer who in full knowledge knew he was paying less than a fair price, and turned around and sold it for millions.
The wrong appraiser can also be equally disastrous if you are insuring a work or collection for too little. An incorrect valuing can leave the insured with not enough money to replace a work when a painting is stolen or damaged. What about a charitable donation? Do you want to risk having the IRS auditing you because of mistakes your appraiser makes?
To find a qualified appraiser, you will need to do a little homework on your own. There are three major professional appraisal associations; Appraisal Association of America (AAA), International Society of Appraisers (ISA) and Appraisers Society of America (ASA). A good place to start looking for a qualified appraiser is through these three organizations. Each organization has a directory of qualified members and lists their area or areas of expertise.
Beware that not all fine art appraisers are equal. An expertise in Asian art does not qualify someone to be an expert in post-modernist European art. Different appraisers have different levels of connoisseurship. Demand to see a resume before you agree to work with an appraiser. Does the appraiser have years of education in their particular field or do they claim to be self taught? Does the appraiser have work history in their area? Did they intern in a museum or gallery? Were they curators or museum directors? What in their backgrounds qualify them to appraise your collection? A qualified appraiser should have specific knowledge and appraisal experience in your specific collection. Ask to see a sample appraisal. You should know what to expect from an appraiser and their reports before you sign them up. Are they clean, follow a standard format and are free from typos? Sloppy work means sloppy results.
Ask for references. An ethical appraiser keeps clients and collections strictly confidential. However; corporations, law firms, insurance companies, fellow members from one of the professional appraisal organizations can usually provide a reference and are familiar with the quality of an appraiser’s work. You can find referrals from museums and galleries as well.
Make sure that the appraiser you choose has no personal interest in your artwork. Your appraiser should not be interested in purchasing your work or selling your work to a specific dealer. Your appraiser should only be willing to place a value on your work and make recommendations of several places you can possibly sell your works. Otherwise, your appraiser may deliberately lowball your work to gain it for a bargain price for themselves.
Never choose an appraiser who charges a percent of what the art work is worth. This is very unethical! An appraiser should be able to quote an hourly fee before doing any work. This fee should be one that is clearly stated and the same for every client. Your appraiser should also be able to give you an estimated quote for the scope of work to be and stick to it. Never accept additional billing for more hours quoted unless you have agreed to this upfront. It is not your problem if an unqualified appraiser spends more time than necessary researching items they don’t have enough previous knowledge on.
Finally, is your chosen appraiser USPAP qualified? USPAP stands for Uniform Standards of Professional Appraisal Practices. Being trained in USPAP assures the client that their appraiser will follow standards. Each of the three professional appraiser organizations requires their members to re-qualify with USPAP every five years.
When you spend the time to find the most qualified appraiser for your collection the results are well worth it. Interviewing several candidates and asking the tough questions will make the most qualified appraiser the obvious choice.
Submitted by,
Christine Guernsey, ISA AM
Guernsey and Associates, Fine Art Appraisals
Friday, November 20, 2009
Tuesday, November 10, 2009
The Fine Art of Preparing for your Appraisal
Whatever the reason for having an appraisal made of your personal property, you can help to ensure a document produced in a timely manner by following a few simple steps:
1. Start your search for the right appraiser early, and make that appointment with as much lead time as possible. Many appraisers are booked in advance, especially for large projects. Appraisals unfold in three parts: the inspection, the research, and the final preparation of the written document. Adequate time for each of these steps lets the appraiser do the best job possible for you.
2. Decide in advance which items you want to include in the appraisal, so that when the appraiser arrives at your house for the on-site inspection, you are prepared to get started. If your appraiser is working on an hourly fee basis, time spent waiting while you search for items in the attic could cost you money. At the very least, know where the items to be appraised are located.
3. Gather all sources of documentation before the appraiser arrives. This would include:
• Sales receipts
• Certificates of authenticity and/or any letters or information from the sales gallery where the object was purchased
• Old appraisals
• Insurance policies listing the items to be appraised
• Any other forms of documentation which establish the provenance of your item(s), including old photographs or letters referring to the objects.
As stated above, research is the central part of the appraisal process. Any help you can give the appraiser may result in speeding up the time it takes to complete your appraisal – and may save you money, too.
The appraiser will photocopy these documents, and include copies of the most pertinent of them in the final appraisal. Additionally, the appraiser keeps copies in his confidential workfiles for 5 years, as required by USPAP. This means that you will have several sources in different places should the original documents become lost.
If you produce information which points to a different valuation for an item after the appraisal is completed, the appraisal will have to be amended and you can incur additional charges.
4. Prepare to have your personal property moved and examined for proper inspection and photographs. For instance, artwork will have to be removed from the walls. Furniture will often have to be moved. It always helps to have a table cleared to serve as a workspace for the appraiser.
These easy steps can all contribute to an efficient, cost-effective process that results in an accurate appraisal.
Submitted by Judy T. Nelson, ISA AM
Guernsey and Associates Fine Art Appraisals
1. Start your search for the right appraiser early, and make that appointment with as much lead time as possible. Many appraisers are booked in advance, especially for large projects. Appraisals unfold in three parts: the inspection, the research, and the final preparation of the written document. Adequate time for each of these steps lets the appraiser do the best job possible for you.
2. Decide in advance which items you want to include in the appraisal, so that when the appraiser arrives at your house for the on-site inspection, you are prepared to get started. If your appraiser is working on an hourly fee basis, time spent waiting while you search for items in the attic could cost you money. At the very least, know where the items to be appraised are located.
3. Gather all sources of documentation before the appraiser arrives. This would include:
• Sales receipts
• Certificates of authenticity and/or any letters or information from the sales gallery where the object was purchased
• Old appraisals
• Insurance policies listing the items to be appraised
• Any other forms of documentation which establish the provenance of your item(s), including old photographs or letters referring to the objects.
As stated above, research is the central part of the appraisal process. Any help you can give the appraiser may result in speeding up the time it takes to complete your appraisal – and may save you money, too.
The appraiser will photocopy these documents, and include copies of the most pertinent of them in the final appraisal. Additionally, the appraiser keeps copies in his confidential workfiles for 5 years, as required by USPAP. This means that you will have several sources in different places should the original documents become lost.
If you produce information which points to a different valuation for an item after the appraisal is completed, the appraisal will have to be amended and you can incur additional charges.
4. Prepare to have your personal property moved and examined for proper inspection and photographs. For instance, artwork will have to be removed from the walls. Furniture will often have to be moved. It always helps to have a table cleared to serve as a workspace for the appraiser.
These easy steps can all contribute to an efficient, cost-effective process that results in an accurate appraisal.
Submitted by Judy T. Nelson, ISA AM
Guernsey and Associates Fine Art Appraisals
Wednesday, November 4, 2009
The Fine Art of Donations for Tax Write Offs
Your CPA (Certified Public Accountant) or tax attorney may have recommended that you donate a work of art in 2009 to a charitable organization for a tax deduction. This is an excellent win/win idea especially during a time when the market for art sales is slow and sellers aren’t realizing hoped-for results. If you have an artwork in your collection that you would like to part with, donations are a viable way of realizing benefits in a financial sense this year.
If you are considering a fine art donation this year, the following 10 points might help you through the process of the donation. In addition, always work closely with your accountant or tax advisor.
1. You must have owned an artwork for at least one year and one day in order for it to qualify for a charitable donation at fair market value. Be sure if you are purchasing a work to donate, that you keep all receipts, any information about the sale including where it was purchased and dates, information about the artist, descriptions of the piece including edition numbers, certificate of authenticity, and cancelled check or charge slip. If you have owned a piece for years, gather as much documentation as you have to prepare for the donation.
2. When it comes to taxes, the IRS only accepts the Fair Market Value of an artwork as a basis from which to begin your calculations. Fair market value is the price the artwork would sell for on the open market between a willing buyer and a willing seller, with neither being required to act, and both having a reasonable knowledge of the work offered. A qualified fine art appraiser can help you to determine a fair market value of an artwork.
3. You must be able to support any donations with written documentation. If your donated art work’s fair market value is below $500, the IRS requires that a bill or sales receipt be included with your tax return.
4. If your artwork is valued at fair market value between $500 and $5,000, you are required to list the details of your gift along with receipts and documentation on the IRS form 8283. Artwork exceeding $5,000 up to $20,000 requires the 8283 form to be completed with information provided by a qualified appraiser that includes value, condition and the extent of any restoration that has been completed to date. In cases where the fair market value exceeds $20,000, the actual appraisal created by a certified appraiser needs to be included with the tax return as well as an original color 8 x 10 photograph of the work.
5. It is important to think about the organization which will receive your donation. The organization must have a “related use” for the artwork. For instance, an outdoor sculpture could be donated to a public outdoor space such a city downtown area or public grounds of a hospital, and a painting could be donated to a museum with a related collection. A qualified charitable donation can provide the best tax advantages. The collector is well advised to obtain a written confirmation of the charity’s “related use” plans for any proposed contributions.
6. A donor must use a qualified appraiser for the type of artwork they are donating. Be aware that not all appraisers are experts in art and those who are, are not experts in all genres and media. The IRS gives more weight to an appraisal from an expert in the area of which you are donating as well as their appraising track record. Make sure you review an appraiser’s resume carefully looking for degrees, certifications, professional appraisal organization affiliations and history of employment and association with galleries, artists and museums.
In no case may the appraiser be the one who sold you the artwork nor can the appraising fees be based on a percentage of the value of the artwork donated.
7. An appraisal must be obtained no earlier than 60 days prior to the date of the donation and no later the deadline for filing the taxpayer’s income tax return, including extensions.
8. Appraisal fees incurred in the process of determining the fair market value of the donated property are not deductible as part of your contribution; however, they may be deductible as a miscellaneous deduction among your other itemized deductions.
9. Your contributions are fully deductible if the total amounts of contributions for the year are 20% or less of your adjusted gross income.
10. If your contributions are more than 20% of your adjusted gross income, the amount of your deduction depends on the type of property donated and the type of organization receiving it. You can deduct up to 30% of your adjusted gross income for items donated in entirety to 501C3 organizations.
Remember that all donations with the intention of receiving a tax deduction in 2009 need to completed before December 31, 2009. Now is the time to think about what you would like to donate, to whom you would like to donate it, and finding a qualified appraiser to help you with the appraising portions of the donation. Non-profit organizations (501C3s) are happy to receive donations useful to their stated purposes and are usually helpful to the donor in addition to the appraiser, tax attorney and/or CPA.
Tax laws are very complicated, before beginning the donation process be sure to work closely with your tax advisor.
Submitted By,
Christine Guernsey, ISA AM
Guernsey and Associates, Fine Art Appraisals
If you are considering a fine art donation this year, the following 10 points might help you through the process of the donation. In addition, always work closely with your accountant or tax advisor.
1. You must have owned an artwork for at least one year and one day in order for it to qualify for a charitable donation at fair market value. Be sure if you are purchasing a work to donate, that you keep all receipts, any information about the sale including where it was purchased and dates, information about the artist, descriptions of the piece including edition numbers, certificate of authenticity, and cancelled check or charge slip. If you have owned a piece for years, gather as much documentation as you have to prepare for the donation.
2. When it comes to taxes, the IRS only accepts the Fair Market Value of an artwork as a basis from which to begin your calculations. Fair market value is the price the artwork would sell for on the open market between a willing buyer and a willing seller, with neither being required to act, and both having a reasonable knowledge of the work offered. A qualified fine art appraiser can help you to determine a fair market value of an artwork.
3. You must be able to support any donations with written documentation. If your donated art work’s fair market value is below $500, the IRS requires that a bill or sales receipt be included with your tax return.
4. If your artwork is valued at fair market value between $500 and $5,000, you are required to list the details of your gift along with receipts and documentation on the IRS form 8283. Artwork exceeding $5,000 up to $20,000 requires the 8283 form to be completed with information provided by a qualified appraiser that includes value, condition and the extent of any restoration that has been completed to date. In cases where the fair market value exceeds $20,000, the actual appraisal created by a certified appraiser needs to be included with the tax return as well as an original color 8 x 10 photograph of the work.
5. It is important to think about the organization which will receive your donation. The organization must have a “related use” for the artwork. For instance, an outdoor sculpture could be donated to a public outdoor space such a city downtown area or public grounds of a hospital, and a painting could be donated to a museum with a related collection. A qualified charitable donation can provide the best tax advantages. The collector is well advised to obtain a written confirmation of the charity’s “related use” plans for any proposed contributions.
6. A donor must use a qualified appraiser for the type of artwork they are donating. Be aware that not all appraisers are experts in art and those who are, are not experts in all genres and media. The IRS gives more weight to an appraisal from an expert in the area of which you are donating as well as their appraising track record. Make sure you review an appraiser’s resume carefully looking for degrees, certifications, professional appraisal organization affiliations and history of employment and association with galleries, artists and museums.
In no case may the appraiser be the one who sold you the artwork nor can the appraising fees be based on a percentage of the value of the artwork donated.
7. An appraisal must be obtained no earlier than 60 days prior to the date of the donation and no later the deadline for filing the taxpayer’s income tax return, including extensions.
8. Appraisal fees incurred in the process of determining the fair market value of the donated property are not deductible as part of your contribution; however, they may be deductible as a miscellaneous deduction among your other itemized deductions.
9. Your contributions are fully deductible if the total amounts of contributions for the year are 20% or less of your adjusted gross income.
10. If your contributions are more than 20% of your adjusted gross income, the amount of your deduction depends on the type of property donated and the type of organization receiving it. You can deduct up to 30% of your adjusted gross income for items donated in entirety to 501C3 organizations.
Remember that all donations with the intention of receiving a tax deduction in 2009 need to completed before December 31, 2009. Now is the time to think about what you would like to donate, to whom you would like to donate it, and finding a qualified appraiser to help you with the appraising portions of the donation. Non-profit organizations (501C3s) are happy to receive donations useful to their stated purposes and are usually helpful to the donor in addition to the appraiser, tax attorney and/or CPA.
Tax laws are very complicated, before beginning the donation process be sure to work closely with your tax advisor.
Submitted By,
Christine Guernsey, ISA AM
Guernsey and Associates, Fine Art Appraisals
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