Frequently Asked Questions
Fine Art Appraisals
What Is an Appraisal?
An appraisal is the act or process of determining value, estimating cost, or determining the present worth of an appreciable asset. Appraisal conclusions are arrived at systematic and thorough analysis and processing of all relevant factors.
Who Needs an Appraisal?
Insurance companies often require separate policies for artwork, individuals and institutions alike should have current valuations performed on their property at least once 5 years or as the market conditions for a particular artist change.
What is the function of an Appraisal?
The function of an appraisal is the use for which it will be employed. It is the reason why the appraisal is being conducted. The function of an appraisal is dictated by the client. Examples of appraisal functions are:
- Replacement Value Services
Replacement Value is the price it would cost to replace an item with one of similar quality purchased in the most appropriate marketplace within a limited amount of time.
- Loss of Value after damage or restoration Services
Loss in value is the reduction of worth resulting from damage and any subsequent restoration.
- Charitable Donations Services
If you're thinking of making a charitable donation of your art and want to receive a tax credit, you will need an appraisal.
- Fair Market Value Services
The fair market value is the price the art would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having a reasonable knowledge of the work being offered.
- Determining federal or state estate tax liabilities
What is the Purpose of an Appraisal?
The purpose of an appraisal is the objective of the appraisal, or what the appraiser is seeking. It may be a monetary opinion such as a value, cost, or present worth. The purpose may also be a non-monetary opinion such as a report of authenticity. The purpose of the appraisal is determined by the appraiser in consultation with the client. Examples of appraisal purposes include:
- Determining fair market value
- Estimating replacement cost
- Estimating repair cost
- Calculating the present worth of future income
- Giving an opinion as to the origin of the property