Frequently Asked Questions
While appraisals are as unique as the items appraised, there are a number of questions we're regularly asked:
+ What does an appraisal contain?
Madison Group Fine Art Appraisals provides appraisal reports that conform to the Uniform Standards of Professional Appraisal Practice (USPAP) promulgated by The Appraisal Foundation, authorized by the US Congress as the source of appraisal standards and appraiser qualifications.
Properly prepared appraisals are individual written reports and are not simple lists of property with numbers attached. The specific content and format of each appraisal report varies according to the individual situation, but each appraisal should contain the following information (as given in the Appraisers Association of America's Elements of a Correctly Prepared Appraisal):
- Name and address of client
- Statement of purpose for the appraisal (ie: Donation, Estate, Equitable Distribution, Insurance, etc.)
- Explanation of the type of valuation used (ie: Replacement Value, Fair Market Value, Marketable Cash Value, etc., and its definition) Explanation of valuation approach (ie: Cost Estimate Approach, Income Approach, Market Data Comparison Approach, etc.)
- Explanation of the market in which the valuation is applied (i.e. the most common market)
- Market analysis (relative market history and discussion of possible projections for future activity) Statement of how objects were acquired (required for IRS purposes)
- Statement of professional qualifications of any and all contributing appraisers (their Curriculum Vitae) and clear division of responsibilities; Date of preparation of appraisal and date on which objects were viewed; as well as the effective date of the appraisal
- Statement of physical inspection or method used in determining value as well as any limiting conditions
- Statement of "disinterest" on the part of the appraiser and statement that the appraisers fee is not contingent on the appraised value of the object(s)
- Statement that the appraiser has not been "disqualified" by the IRS (for IRS appraisals)
- Statement of "Assumptions and Limiting Conditions"
- Statement of belief in authenticity that the appraised object(s) correspond to description(s) listed in the appraisal
Thorough physical description of the appraised objects including:
- Brief biography of the artist / maker
- Exhibition and publication history
- Statement of condition of appraised objects
- Comparables and related analysis
- Firm statement of value
- Signature of appraiser(s) and tax ID number(s) when appraisal is prepared for IRS purposes
- Photographs of the property
+ When would I need a personal property appraisal?
Maybe you don’t even consider yourself an art collector, but over the years you and your spouse have purchased numerous prints, drawings, ceramics, and a few paintings from local galleries as well as when you travel. One day you might realize that all of this has added up and, you wonder if you have enough insurance? Perhaps you don’t even know what some of it is worth these days?
An insurance appraisal is an evaluation of your property to determine the “retail replacement value” which is usually named in your insurance policy. It is defined as “the amount it would cost to replace an item with one of similar and like quality, purchased in the most appropriate marketplace, within a limited period of time.” In the event of loss, your appraisal can verify that the quality of the replacement is similar to the item to be replaced.
Donations and Gifts
Maybe you’d like to make a charitable donation of a painting to a Museum, or give a piece of pottery or a vintage photograph to a family member or friend? How does that affect your tax return?
In order for you to receive the appropriate tax deduction, the IRS requires taxpayers to submit a qualified appraisal of “fair market value” for any charitable donation of an object valued at over $5,000. The value is higher ($10,000) for gift or estate tax purposes. An appraisal can also help you to decide if you want to make your donation all at once, or in stages.
Divorce or Estate Planning
If you need to divide or sell your property, how do you know what it is worth and how do you identify the best market?
An appraisal of “marketable cash value” helps you to understand what your property is worth so it can be divided or sold in the most appropriate way. This type of appraisal is also helpful in dividing businesses and other jointly owned property.
What is my painting worth?
Maybe you just want to know the current value of your property?
A “fair market value” appraisal can help you decide whether to hold onto something, to sell it, or to give it away in favor of a tax deduction.
+ What is a personal property appraisal?
Fine Art Appraisals are defined in different ways in a variety of contexts. Generally speaking, it is an informed opinion or statement of value about your property that may serve as legal documentation. At Madison Group Fine Art Appraisals, we work with our clients to provide professionally researched and qualified appraisal reports that are personalized and appropriate for your needs. We help you to plan for the future and make economic decisions about your personal property. We also provide necessary documentation for your insurance company, for the IRS, and for use in courts of law. Our personalized style of communication guarantees that our appraisals are tools that you, our client, can understand and use.
+ Who are appraisers, and what does an appraisal cost?
Personal property appraisers are not licensed and are often done by people who have a variety of backgrounds. When you work with Madison Group Fine Art Appraisals, you are assured to be working with a qualified and experienced arts professional who is knowledgeable in the field of the object to be appraised and knowledgeable in the legal, financial, and technical requirements of the appraisal. Each MGFAA appraisal contains a statement of professional qualifications of any and all contributing appraisers (their curriculum vitaes).
We specialize in Fine Art, Antiques, Decorative Arts, and Furniture. For collections involving property in other fields or disciplines, we work with colleagues who have equivalent expertise in their areas and this collaboration is documented within the appraisal.
We have been tested and certified under the Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP) and adhere to strict ethical standards put forth by the Appraisers Association of America.
All appraisal work is charged on an hourly or per diem basis based on the time spent in examining the property and the research time involved in the preparation of the appraisal report. The appraisal fee is in no way related to the value of the object of the value appraised.