Recently, I have received a few off-list appraisal
questions. Because of the question posed two days ago
I thought I would share some useful info with the
list. According to "Art Law" by Ralph E. Lerner and
Judith Bresler, "If the taxpayer is careful in
selecting the appraiser and if the appraisal includes
the elements set forth in the regulations as to a
qualified appraisal - that is, if, among other
requirements, there are comparable sales and the
valuation methods of the appraiser are set forth -
valuation cases could be settled with the IRS." p. 356
Ethically, there are some problems with museum
professionals appraising objects but perhaps a more
relevant issue is the appraisal itself. Appraisals
are composed of more than just monetary values.
Elements of a correctly prepared appraisal report
include the purpose, terms and marketplace context in
which the value is determined, the data and sources
examined, and the analysis which was applied, a full
description of the object, (appropriate to its value,
importance, and the purpose, applying the evaluative
experience of the appraiser), and the value
conclusion.
Appraisers own books, subscribe to catalogs and
databases and maintain contacts in both the museum and
gallery world. Although artist, style, and subject
are important components to the appraisal the
appraiser is interested in what an someone else would
pay in a given marketplace. For donation purposes,
the appropriate marketplace is the fair market. The
definition of Fair Market Value (FMV) is, "the price
that property would sell of on the open market between
a willing buyer and a willing seller, with neither
being required to act, and both having reasonable
knowledge of the relevant facts." It must also be
noted that if a restiction is put on the use of
property to be donated, the FMV must reflect that
restriction. The FMV has ben specified and modified
by various court decisions.
Appraising is a ever-changing field. Although most
museum professionals have an understanding of the
objects, the history, and perhaps even the monetary
value, there is usually little reason for them to
understand the process of appraising.
Thanks
Christian Trabue, Appraiser
Louisville, KY
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