A formal appraisal for artwork or collectibles must be submitted to the IRS for a donation of five thousand dollars or greater. Collector’s Fine Art Appraisal has performed many high level donations all of which have been accepted by the IRS. There are many nuances, complex issues and methodology, involved with donation appraisals. Any misstep or lack of qualifications could result in rejection of the donation value. Expertise is the utmost requirement of an appraiser for a donation, of significant value, and acceptance by the IRS.
True Story: A client seeks to donate a painting which is already desired for acquisition by a notable museum. The artist is not necessarily considered museum quality merit. However, the importance of this artist and this subject matter, to American History for this specific museum, is a curatorial enhancement. This artist trades infrequently and poorly at auction and the most common marketplace for this artist is the retail gallery environment. Correspondingly, a donation appraisal is based on Fair Market Value and most common marketplace, which in this case, is retail. The Fair Market Value for this donation is retail value which is significantly higher than the auction market. Ironic that an artist with relatively weak merit could be valued at the highest level.