By Sarah McCullom
We have all watched the enormously popular show on TV, Antiques Roadshow, and many of us have seen things “just like” or similar to things we own, and have wondered if we have a valuable piece hiding in our attic!Is what they do on the show an appraisal? Do I need an appraisal for all the items my Grandmother and Great Aunt left me?
First of all – the values on the Antiques Roadshow are not actually appraisals, they are professional opinions, and can not be used by the individuals for any purpose other than information on their piece. It is highly entertaining television, has wonderfully knowledgable appraisers on it, and has certainly done a lot to educate us that many items you wouldn’t think have great value, actually do. It has certainly made us more observant, but a real appraisal consists of a lot more than that.
Written appraisals are not always needed, but there are three basic reasons for obtaining a written appraisal.These are estate valuation, insurance and charitable donations/tax deductions.
Estate Valuation. Have you ever considered the value of the items you own, and even how they will be divided among your heirs? You can help your heirs, as well as get an idea of the value of your items, by talking to an appraiser. Written appraisals will give you the information you need to assist you in making crucial decisions now, rather than others making those decisions at a time of crisis.Keep in mind that not everything is worth appraising. A qualified appraiser can help you decide what should be appraised. Sometimes all you need is a professional consultation.A qualified appraiser will be happy to provide this for you at an hourly fee.
In addition, with the death of a loved one, it is sometimes necessary to do an appraisal of the personal property in an estate for distribution, valuation and/or tax purposes.
Insurance.Insurance companies require a written appraisal for valuable items such as jewelry, original art and when values are over a certain limit. Each company varies on their requirements, so be sure and check to see what your company requires. If you do not have the proper coverage on these valuable items, say with a schedule or floater on your homeowners policy, you may not be reimbursed for the current value if you make a claim. It is also best to update insurance appraisals every three years.If you use the same appraiser for the update, the cost should be less than the original appraisal. Just remember that insurance companies reimburse on the basis of the most current appraisal submitted, and the insurance acquired as a result.
Charitable donations/Tax Deductions. The IRS requires written appraisals for items donated to charity if the item or group of like items has a value of $5,000.00 or greater. The appraiser must be a qualified appraiser by the IRS definition in order for the appraisal to be acceptable.In general, the appraiser “holds himself out to the public as an appraiser”; “is qualified to make appraisals for the property being valued”; “is not an excluded individual”; and “understands that an intentionally false overstatement of the value…may subject him to penalty….”.Be sure and ask the appraiser if this is the case before you hire him/her. Any appraiser who fails to follow these requirements can not only be heavily fined, but identified by the IRS as an “unqualified appraiser” who’s appraisals will be disqualified. Further explanation of a qualified appraisal and a qualified appraiser are discussed in Publication 561 under “Qualified Appraisal”, pg. 10. Additional information on charitable donations can also be found in Publications 526.The IRS form used for charitable donations is 8283.
Appraisal reports are legal documents. The appraiser has an obligation to provide “due diligence” when appraising an item. The appraiser is also responsible for the contents of the report in a court of law for a minimum of five years, and longer if there is ongoing litigation. An accurate and professional report is worth paying a qualified appraiser - if for no other reason than peace of mind that your valuables are protected, your heirs are provided for, and all requirements are met for the IRS.