If you’ve ever had something stolen from you, or sold an item and been disappointed by the
price you received, you know how important it is to have your personal property appraised. But
what if your item isn’t worth much? Or what if it’s so valuable that it might be better off in a
vault than in your home? Personal property appraisals can help with both of these scenarios—
and many more! In this article, we’ll walk through the different types of personal property value
assessments and why they’re useful.
Why Have Your Personal Property Appraised?
- To make sure you’re getting a fair price when you sell it
- To make sure you’re getting a fair price when you buy it
- To make sure you’re getting a fair price when you buy it.
What Personal Items Should be Appraised?
Before you decide to get an appraisal, you should ask yourself what it is that makes this
personal property so valuable. Is the item one of a kind? Does it have sentimental value? Is it
difficult to replace or store? If so, then a professional appraisal might be worth your time and
money.
Here are some things to consider when deciding whether or not a certain type of personal
property needs an appraisal:
Are there other items like this one out there? If so, how much would they typically sell for?
What is the history behind this item (who owned it before me)? Do I know any details about its
manufacture or origin that could add value to its price tag?
Would anyone else want my item if they knew what they were getting into with it (if so, why)?
How much would someone pay in order for them not only own this item but also have access
to all the information attached with owning such an object—information that could possibly
increase its value even further!
Insurance Appraisal
An insurance appraisal is a professional evaluation used to determine the value of an item in
case of loss or damage. An insurance appraisal can also be used for divorce cases where one
party is trying to get reimbursement from another party’s homeowner’s or renter’s insurance
policy. If you’re in need of an appraisal for donations made for charitable tax deductions, our
experts can help you with that as well!
Some extra points that we should cover in this section:
The cost approach estimates value by adding the cost of land and subtracting depreciation.
This method takes into account how much it would cost to construct an identical structure
today based on its materials costs along with labor costs at prevailing rates.
Replacement Appraisal
A replacement appraisal is a type of appraisal that determines the value of an item based on its
replacement cost, not its current market value. The replacement cost is the amount of money it
would take to replace an item with a new one. This can be done for personal property, real
estate, or intangible assets such as patents and copyrights.
Division of Assets (Divorce)
Divorce is never easy, but it can be made a little easier if you understand your options for
dividing assets. If you can’t agree on the value of your assets, then it’s time to call in an
appraiser.
Divorce appraisals are different than other kinds of personal property appraisals because they
involve more than just valuing the furniture and other items that belong to each party. In fact,
divorce appraisals are meant to determine which party should get what percentage of all
assets acquired during the marriage (including those acquired before).
Non-Cash Charitable Contributions to a Qualified Organization
If you’re donating items to charity, make sure the item is in good condition and still usable. For
example, a car that doesn’t run or isn’t safe for driving won’t be considered a charitable
contribution by the IRS. In addition, only clothing and household items that are in wearable
condition can be deducted from your taxes as donations; otherwise, they will not be
deductible.
If your donation is valued at less than $500 and you don’t receive any goods or services from
the organization as a result (such as tickets to a fundraising event), then no form needs to be
filed with the IRS when making these donations. However, if your non-cash donations exceed
this amount and/or if there is an exchange of something of value (for example: tickets), then it’s
important to get an appraisal completed before filing your taxes so that both parties can avoid
penalties and fees later on down the road!
Estate and Gift Tax Returns
(https://www.irs.gov/tax-professionals/estate-and-trusts/frequently-askedquestions)
Estate tax returns are filed when a person dies. The filing deadline is usually 9 months after the
date of death, but if you don’t have to file a federal estate tax return because your taxable
estate does not meet or exceed the filing threshold for the year, you can file for up to two years
following the date of death. For example, if someone dies on Oct. 20, 2016 and his or her
taxable estate does not exceed $5 million for 2017 (the $5 million is indexed annually for
inflation), he or she would be able to file an estate tax return until October 2020 (2021 in this
case). However, if your deceased loved one had more than $5 million in assets at the time of
death and was required to file an estate tax return in 2017 due to that high amount—or if he
had been given property as a gift between 2010 and 2012—you may have some additional
paperwork requirements related to gifts made during those years.[Gift Tax Returns](https://
www.irs.gov/publications/p590/)* Gift tax returns are filed when someone makes gifts valued
over certain thresholds during their lifetime.[Noncitizen Estate Tax Returns](http://
www.irsprobonoorg/article/2438)
Capital Gains and Losses (Income Tax Returns)
Capital gains and losses are reported on Form 8949, then transferred to your 1040. Capital
gains are taxable, while capital losses can be used to offset other income.
If you’re selling property that’s been held for less than one year (short-term capital gains), you’ll
pay taxes at a higher rate than if it is held for over a year (long-term).
A “cost” appraisal.
A cost appraisal is the most basic type of appraisal and is used for a variety of purposes. It’s
used to determine the cost of replacing an item if it were to be damaged or destroyed. This
type of appraisal can also be used for insurance purposes, estate planning, and tax purposes.
The “sales comparison” approach.
The “sales comparison” approach is the most commonly used method of appraisal. It is based
on the idea that the value of an item is the price it would sell for in the open market. This type
of appraisal requires information about sales prices from several comparable properties, which
can be obtained from local real estate agents or brokers. The appraiser will then compare your
property to these comparable properties and determine its value using this information.
The “income” approach.
The income approach is based on the income you could have earned from the asset if you had
sold it. This method is usually used to value assets that are not easily sold, such as businesses
or homes.
Any item of value can be appraised, which is why it’s important to know where to start
looking for an appraiser.
Once you have a better idea of what type of appraisal you need, it’s time to find an appraiser.
When searching for an appraiser, it is important to ask about their qualifications and
experience. Ask them:
- How long they’ve been in business
- A list of clients they’ve worked with in the past (this will give you an idea if other people have
trusted them) - What types of property they specialize in appraising (for example, jewelry? antiques?)
Do they follow local or national standards for their profession? - If possible, get references from previous clients so that when you call them up and ask about
the quality of service provided by said appraiser(s), they can give accurate feedback without
bias towards either party involved.
Conclusion
We hope this introduction to personal property appraisals has given you some insight into how
they work and how they can help you. Keep in mind that the value of an item is determined by
many factors, including its condition, original cost and current replacement value. When you’re
ready to have your items appraised, we’d be happy to help! If you are looking for help in running an Estate Sale feel free to contact us. We’d love to help!