As an executor or trustee, you may need an appraiser to estimate the value of the assets of the decedent’s estate. You will need to provide asset valuations on Form 706, and you will need to have official appraisal documentation from a qualified appraiser in the event that the IRS questions your valuations. Be sure to secure accurate appraisals for jewelry, antiques, artwork, and real estate.
When searching for an appraiser, go first to the source. For example, if you need an appraisal of a piece of jewelry in the estate, try to find the jeweler who sold it. He or she may still have the original documentation and will be able to prepare an official estimate of value.
Likewise, real estate agents often have certified appraisers in their offices. If you need to value a rare coin collection, go to the local rare coin dealer. In fact, people who sell specialized property are used to appraising, and it’s typically one of the services they offer.
Of course, some property is one-of-a-kind and appraisals for these items can be notoriously difficult to obtain. In the case of artwork by an artist who’s still living, the gallery that represents his or her work should be able to provide you with a written appraisal.
Auctioneers from top-echelon auction houses can provide appraisals for artwork from deceased artists as well as for antique furnishings. Occasionally, you’ll run across singular pieces of art or furnishings that may require you to inquire of art museum curators.
Appraisals are increasingly coming under IRS scrutiny. If you need to obtain an appraisal of the decedent’s property, make sure that the person appraising the property is an expert in that field. The appraiser will, as a rule, attach to the appraisal a resume or curriculum vitae showing his or her qualifications. If it’s not attached to the official appraisal, ask for it.
Should the IRS ever question the valuations you use on a Form 706, appraisals jotted down on a piece of paper may not fly, but one that documents the value of the item in question and the qualifications of the appraiser most likely will.