The Appraisal Qualification Board (AQB), which is a branch of The Appraisal Foundation (AF), announced changes effective January 1, 2018, to the minimum qualification criteria for Personal Property Appraisers. Currently the members at the Accredited Member (AM) and Certified Appraiser of Personal Property (CAPP) level in the International Society of Appraisers (ISA) already meet or exceed these requirements. For a summary of the new criteria follow this link - https://appraisalfoundation.sharefile.com/share?#/view/sb6f21b783fc4d35b.
Not every personal property appraiser is affiliated with one of the three Professional Organizations for Personal Property Appraisers, namely the International Society of Appraisers (ISA), the American Society of Appraisers (ASA), and the Appraisers Association of America (AAA). Members of these organizations are required by the organizations to meet national qualification requirements, comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and adhere to the ethical standards set by the AF and these organizations. Because Personal Property Appraisers are not licensed as are Real Property Appraisers, those persons who hold themselves out to be Personal Property Appraisers and are not affiliated with one of these professional organizations are only encouraged to be in compliant with these requirements.
How Does This Affect You?
The IRS has specific definitions of a “qualified appraiser” and "excluded individuals" for non-cash charitable contributions as amended in section 1219 of the Pension Protection Act of 2006, which is as follows:
QUALIFIED APPRAISER —Except as provided in clause (iii), the term ‘qualified appraiser’ means an individual who--
(I) 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,
(II) regularly performs appraisals for which the individual receives compensation, and
(III) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.
(iii) SPECIFIC APPRAISALS —An individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless --
(I) the individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and
(II) the individual has not been prohibited from practicing before the Internal Revenue Service by the Secretary under section 330(c) of title 31, United States Code, at any time during the 3-year period ending on the date of the appraisal.
[https://www.congress.gov/109/plaws/publ280/PLAW-109publ280.pdf]
The IRS has additional requirements for selecting a qualified appraiser. Below are the criteria prescribed by the Secretary in IRS Publication 561 Determining the Value of Donated Property about who cannot be a “qualified appraiser.”
EXCLUDED INDIVIDUALS - The following persons cannot be qualified appraisers with respect to particular property.
1. The donor of the property, or the taxpayer who claims the deduction.
2. The donee of the property.
3. A party to the transaction in which the donor acquired the property being appraised, unless the property is donated within 2 months of the date of acquisition and its appraised value is not more than its acquisition price. This applies to the person who sold, exchanged, or gave the property to the donor, or any person who acted as an agent for the transferor or donor in the transaction.
4. Any person employed by any of the above persons. For example, if the donor acquired a painting from an art dealer, neither the dealer nor persons employed by the dealer can be qualified appraisers for that painting.
5. Any person related under section 267(b) of the Internal Revenue Code to any of the above persons or married to a person related under section 267(b) to any of the above persons.
6. An appraiser who appraises regularly for a person in (1), (2), or (3), and who does not perform a majority of his or her appraisals made during his or her tax year for other persons.
[https://www.irs.gov/pub/irs-pdf/p561.pdf]
Therefore, an appraisal for a non-cash charitable donation is required by the IRS to be provided by a Qualified Appraiser. Insurance companies are more often following suit, especially when the purchase date of the property is more than five years old.
When engaging appraisal services from a Personal Property Appraiser, you should consider hiring an appraiser who is a member of one of the above organizations.
Visit us on LinkedIn and Facebook
LJG Fine Art Appraisal/Research Services LLC
Hours by appointment only
210.884.0556
ljgartappraisal@yahoo.com
© 2019 - LJG Fine Art Appraisal/Research Services LLC - All Rights Reserved
Not every personal property appraiser is affiliated with one of the three Professional Organizations for Personal Property Appraisers, namely the International Society of Appraisers (ISA), the American Society of Appraisers (ASA), and the Appraisers Association of America (AAA). Members of these organizations are required by the organizations to meet national qualification requirements, comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and adhere to the ethical standards set by the AF and these organizations. Because Personal Property Appraisers are not licensed as are Real Property Appraisers, those persons who hold themselves out to be Personal Property Appraisers and are not affiliated with one of these professional organizations are only encouraged to be in compliant with these requirements.
How Does This Affect You?
The IRS has specific definitions of a “qualified appraiser” and "excluded individuals" for non-cash charitable contributions as amended in section 1219 of the Pension Protection Act of 2006, which is as follows:
QUALIFIED APPRAISER —Except as provided in clause (iii), the term ‘qualified appraiser’ means an individual who--
(I) 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,
(II) regularly performs appraisals for which the individual receives compensation, and
(III) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.
(iii) SPECIFIC APPRAISALS —An individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless --
(I) the individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and
(II) the individual has not been prohibited from practicing before the Internal Revenue Service by the Secretary under section 330(c) of title 31, United States Code, at any time during the 3-year period ending on the date of the appraisal.
[https://www.congress.gov/109/plaws/publ280/PLAW-109publ280.pdf]
The IRS has additional requirements for selecting a qualified appraiser. Below are the criteria prescribed by the Secretary in IRS Publication 561 Determining the Value of Donated Property about who cannot be a “qualified appraiser.”
EXCLUDED INDIVIDUALS - The following persons cannot be qualified appraisers with respect to particular property.
1. The donor of the property, or the taxpayer who claims the deduction.
2. The donee of the property.
3. A party to the transaction in which the donor acquired the property being appraised, unless the property is donated within 2 months of the date of acquisition and its appraised value is not more than its acquisition price. This applies to the person who sold, exchanged, or gave the property to the donor, or any person who acted as an agent for the transferor or donor in the transaction.
4. Any person employed by any of the above persons. For example, if the donor acquired a painting from an art dealer, neither the dealer nor persons employed by the dealer can be qualified appraisers for that painting.
5. Any person related under section 267(b) of the Internal Revenue Code to any of the above persons or married to a person related under section 267(b) to any of the above persons.
6. An appraiser who appraises regularly for a person in (1), (2), or (3), and who does not perform a majority of his or her appraisals made during his or her tax year for other persons.
[https://www.irs.gov/pub/irs-pdf/p561.pdf]
Therefore, an appraisal for a non-cash charitable donation is required by the IRS to be provided by a Qualified Appraiser. Insurance companies are more often following suit, especially when the purchase date of the property is more than five years old.
When engaging appraisal services from a Personal Property Appraiser, you should consider hiring an appraiser who is a member of one of the above organizations.
Visit us on LinkedIn and Facebook
LJG Fine Art Appraisal/Research Services LLC
Hours by appointment only
210.884.0556
ljgartappraisal@yahoo.com
© 2019 - LJG Fine Art Appraisal/Research Services LLC - All Rights Reserved