Liquidations and Other Types of Appraisals
Other Types of Appraisal Services
There are a number of other circumstances which may call for appraisal services. Several are listed below. Contact WorthWise to discuss your unique appraisal service needs.
Liquidation appraisals are often required when personal property must be distributed, divided, sold or converted into a cash equivalent in a fairly short timeframe. The amount of time available to do this will determine if the liquidation is an orderly liquidation, a forced liquidation, or a quick sale. In addition to being appropriate for property being sold due to inheritance, or distributed due to divorce or business dissolution, there are a number of other circumstances in which personal property may also require a liquidation appraisal such as:
- When a client has personal property he or she wishes to sell
- When property is seized by the IRS for non-payment of taxes
- When legal property is seized by U.S. Customs that was brought into the U.S. illegally
- When legal property is seized by the U.S. Marshals Services that was acquired as a result of criminal activity
- When personal property is used as collateral for loans in the event of a loan default
- When property must be sold due to bankruptcy as needed to distribute cash to creditors
These are sometimes required for property processed in Probate Court if the estate value exceeds at least a certain minimum level for the purposes of filing any income, estate, inheritance and gift taxes.
Property Held in Trust Appraisals:
Trusts are typically used to keep personal property from being included in estate taxes or processed through probate. Appraisers may be called upon to prepare appraisals for property held in trusts for any number of reasons including to obtain and update insurance policies, to make tax-deductible non-cash charitable contributions, to distribute among beneficiaries or to use for asset based loan collateral.
State Inheritance Tax Appraisals:
Some states have state inheritance tax laws in addition to the federal laws. The laws regarding how property should be valued differ from state to state. It is important to know what state inheritance tax laws are in effect in your state.
Appraisals may be required so that guardians can make sound decisions regarding the management of another person’s property including their sale or to defend their decisions regarding property management to a court. Guardianship laws vary by jurisdiction.
Casualty Loss or Theft Appraisals:
Owners of personal property stolen, lost or destroyed as a result of a disastrous event such as a fire, flood, hurricane, earthquake or accident may be able to deduct that loss from their adjusted gross income for tax purposes. The amount of the loss requires an appraiser to calculate the lesser of the decrease in the fair market value as a result of the theft or casualty or the adjusted basis in the property before the loss.
Asset-based Lending Appraisals:
A loan made through a bank or other lender is often secured by some kind of personal property collateral such as a car, machinery, or equipment. More recently, art, antiques and significant collections are also being used as collateral. An appraisal may be required at the time of the loan origination to confirm the value of the collateral. One may also be required as stated above if the collateral needs to be liquidated in the event of a loan default.
WorthWise has performed many of these other appraisal services, and we are committed to providing you with the best and most accurate appraisals possible. If we do not currently have, or cannot efficiently and effectively acquire, the expertise needed to take on an unusual request for other appraisal services, we will let you know and will refer you to another appraisal firm or specialist where possible.
Don’t assume that you can sell an item in the secondary or auction market for as much or more than you paid for it in the primary retail market! Retail prices in the primary market are typically higher because they must cover such costs as shop owner commissions, facility rent and utilities, marketing materials, and employee salaries, in addition to paying the artist for their work. It’s safer to expect to get significantly less when you sell in the secondary market.
“When you buy something from an artist you are buying more than an object. You’re buying hundreds of hours of errors and experimentation. You’re buying years of frustration and moments of pure joy. You’re not buying just one thing, you are buying a piece of a heart, a piece of a soul… a piece of someone else’s life.“
~ Rebekah Joy Plett