Fine Art Frequently Asked Questions
What is the process of an appraisal?

An Appraiser first assessing the purpose of the report, the appropriate market for valuation and the approach to value. Different uses of Appraisals require different types of value. For example, insurance carriers require Retail Replacement Value reports, the IRS generally requires Fair Market Value, an Equitable Distribution report may call on Marketable Cash Value.

What is the cost to appraise fine art?

Appraisal Bureau charges flat fees for our reports based on the number of artists and artworks included. For Fine Art reports our minimum fee is $1,000.

What do art appraisers do?
Art Appraisers assess the value of artworks for a defined purpose using the relevant market and approach to value for the end use.
What is a qualified appraisal?

Fine Art Appraisers must be USPAP (Uniform Standards of Professional Appraisal Practice) compliant, completing an initial 15 hour course and exam, followed by a 7 hour course update every 2 years. There is no “license" to appraise, rather compliance to USPAP. The IRS defines a qualified appraiser as follows: Section 170(f)(11)(E)(ii) provides that the term qualified appraiser means an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary, (2) regularly performs appraisals for which the individual receives compensation, and (3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance. Section 170(f)(11)(E)(iii) provides that an individual will not be treated as a qualified appraiser with respect to any specific appraisal unless that individual (1) demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and (2) has not been prohibited from practicing before the IRS by the Secretary under section 330(c) of Title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

What are the purposes of appraisals?
Appraisal Bureau issues Appraisals for purposes of Insurance, Equitable Distribution, Tax & Estate Planning, Charitable Donation and Art as Collateral. We are always third-party neutral, with no bias to conflict with any party.
What are the different types of value, and how are they applied?

Different end uses of Appraisals may require different types of value. Insurance generally relies on Retail Replacement Value. Fair Market Value may be applied to anything submitted to the IRS, including Charitable Donation. Art as Collateral either calls for Fair Market Value, or Marketable Cash Value – which is generally Fair Market Value less the cost of owning and selling. Other circumstances may apply for Liquidation Value or Block Discounts.

What is the appraisal foundation?

This is an independent organization established in 1987 by the US government with members from various appraisal organizations. The Foundation now receives federal funds and is empowered by Congress to establish standards for all aspects of the appraisal profession.

Do you need to inspect the artwork in person to write an appraisal?
Not necessarily. We can appraise from photographs. If needed to conduct site visits or if send works to a conservator for a full report.
Marketable Cash Value (MCV)
The net value a willing seller realizes after disposing of property in a competitive and open market to a willing buyer. Both the buyer and seller must be reasonably knowledgeable of all relevant facts, and neither being under constraint to buy or sell. Marketable cash value takes into consideration insurance, dealer commissions, advertising, travel, and shipping expenses that may be involved in the sale.

*IRS definition as stated in the Treasury Regulation Sections 1.170A-1 (c) (2)

Liquidation Value

Forced Liquidation Value is defined as the net price in terms of cash, or other precisely revealed terms, for which the property would change hands if sold immediately, without regard to relevant marketplace and appropriate use.

*IRS definition as stated in the Treasury Regulation Sections 1.170A-1 (c) (2)