uspap complete packet, new

BACKGROUND INFORMATION USPAP

CITY: ______________________________ DATE: _____________________________

PLEASE NOTE THAT UPON SUCCESSFUL COMPLETION OF THIS USPAP COURSE, YOUR CERTIFICATE WILL BE SENT TO THE FOLLOWING ADDRESS.

NAME _________________________________________________________________________________________ ADDRESS ______________________________________________________________________________________ CITY _____________________________________________ STATE ________________ ZIP __________________ HOME PHONE ________________________________ BUSINESS PHONE ________________________________ OTHER PHONE ___________________ EMAIL (WRITE NEATLY) ________________________________________ PRESENT OCCUPATION _________________________________________________________________________ HIGHEST DEGREE OF EDUCATION: SPECIFY FIELD _______________________________________________ COMPUTER EXPERTISE LEVEL (circle) Professional High Average Minimal None WHEN DID YOU LAST TAKE USPAP? ______________ WHAT IS YOUR BACKGROUND IN APPRAISING? WHAT IS YOUR AREA OF SPECIALIZATION? ____ Generalist _____ Photography ____ Fine Arts _____ Tribal ____ Decorative Arts _____ Oriental ____ Jewelry _____ Judaica ____ Collectibles _____ Textiles ____ Paintings _____ Prints ____ Other ______________________ HOW MANY YEARS HAVE YOU BEEN A MEMBER OF AAA? ________ HOW MANY YEARS HAVE YOU BEEN A MEMBER OF ASA? ________ HOW MANY YEARS HAVE YOU BEEN A MEMBER OF ISA? ________ DO YOU WANT TO BECOME A MEMBER OF AAA? ___________ ARE YOU A MEMBER OF OTHER PROFESSIONAL ART, ANTIQUE, DEALER, OR APPRAISAL ASSOCIATIONS? PLEASE SPECIFY. WHAT IS YOUR OBJECTIVE IN TAKING THIS COURSE (check as many as apply and be as specific as possible): ____ Exploring career alternatives ____ Want to update appraisal skills ____ Want to establish an appraisal business part-time ____ Want to establish an appraisal business full-time ____ Want to appraise as an adjunct profession ____ Want to be a dealer ____ Want to expand skills to be applied in another field (insurance, law, accounting, etc.) ____ Other: _______________________

GAYLE M. SKLUZACEK, AAA Principal Appraiser, Fine Art Specialist, and Review Appraiser, Abigail Hartmann Associates, New York Appraisal experience: Paintings, works on paper, prints, posters, sculpture, photographs, art glass, art ceramics,

architectural interiors, textiles, rugs, Americana, Japanese prints, manuscripts, books, Judaica, Orientalia, tribal art, Pre-Columbian art, collectibles, artists’ estates, archives, antique furniture, porcelain, silver, general contents

Specialization: European art, 15th - 20th century

American art, 17th - 20th century (certified) Prints, 20th century, American (certified) Wine (certified)

Education: AQB Certified USPAP Instructor, Certified through June 2009

The Appraisal Foundation, Washington, D.C.

Uniform Standards of Professional Appraisal Practice Tested and Passed, May 1994, June 1999, June 2004

Master of Arts Degree Program, Art History Department University of Chicago (Thesis: Marguerite Gerard)

Graduate Department of Architectural History University of Minnesota (Thesis: Bernini)

Bachelors of Art, Art History Department Barat College, Lake Forest, Illinois

Professional Affiliations: Appraisers Association of America (AAA), Certified Member

International Society of Appraisers, Member International Foundation for Art Research Cooper-Hewitt Museum, New York Metropolitan Museum of Art, New York Museum of Modern Art, New York National Museum of Women in the Arts, Washington, D.C. Whitney Museum of American Art, New York Les Amis du Vin

Ms. Skluzacek has worked in curatorial, research, and public relations positions at the Minneapolis Institute of Fine Arts, the Chicago Art Institute, the Oriental Institute, and the Carnegie Institute. In 1981, she became involved in art appraising where she has catalogued important collections, estates, and archives, identified lost masterpieces, served as an art/personal property expert in court cases, including IRS cases, and has worked closely with major museums in their art acquisition programs. She has taught art and wine collecting/appraising courses for the NYC Board of Education and the NJ Center for the Arts. Since 1995 Ms. Skluzacek has been on the faculty of FIT's Graduate School, teaching Valuation and Appraisal. She has been on the faculty of NYU's Appraisal Studies Department since 1992, where she teaches American Art and Research Methods for Appraising. Through NYU and the AAA, Ms. Skluzacek coauthored and taught the first course on Uniform Standards of Professional Appraisal Practice (USPAP) to personal property appraisers in the US. In 2001 she was invited by the Cuban government to teach a course on appraising in Havana. Currently she is working with Florida State University to develop an international online accredited course for appraisers. Ms. Skluzacek was elected to the Board of Directors of the AAA in 1992 and has been an officer of the AAA since 1994 where she served as President in 2000-2002. She is listed in Who's Who of American Women, Who's Who of Emerging Leaders in America, and Who's Who in Society.

386 Park Avenue South, Suite 2000 New York, NY 10016

Tel 212 889 5404 Fax 212 889 5503

Email: [email protected] Website: www.appraisersassoc.org

POSITION PAPER OF THE AAA on

PROFESSIONAL OPINIONS OF VALUE (POVs) Over the past few years many members of the Appraisers Association of America have been requested to give estimates of value which are different from and do not meet the minimum standards of formal appraisals. These requests for verbal or written estimates have come from a variety of sources: television or other forms of popular media such as The Antiques Road Show or “Ask the Experts" columns in newspapers and magazines; or in the form of internet inquiries in which a client will submit a digital image and the appraiser is asked to give an estimate of value based on the quality of the image submitted. Other situations in which such opinions of value are required include: pre-sale estimates from auctioneers, initial consultations with clients, and internal review of appraisal documents for third parties such as insurance companies, et al. Such forms of valuation clearly do not meet the standards of written or verbal appraisals where the appraiser has the time to perform an acceptable inspection, has time to research the object(s) in question and has time to describe the most appropriate market for sale or purchase among other essential valuation factors.

The AAA recognizes that while such estimates of value do not meet appraisal standards they are a reality of life in the 21st century where clients want pricing information quickly, and requests for this type of information will only proliferate as new technology is introduced in years to come.

With this in mind, the Board of Directors of the AAA, after great deliberation, has decided to allow its members to perform such services without being subject to a violation of the AAA Code of Ethics, providing certain conditions are met.

Definition of Service:

Foremost of these conditions is that the type of service performed is clearly defined and in no way could or should be confused with an actual appraisal. For this reason the AAA suggests that these types of estimates be called Professional Opinions of Value (POVs), a term which has no written or audible similarity to "appraisal." In order to distinguish a POV from a formal appraisal, the appraiser may wish to state the value as a range instead of a fixed amount. The client should be informed that the work product of the appraiser is not an appraisal, but something distinct and less than a formal appraisal due to the extraordinary limiting conditions under which such professional services are offered. The client should be informed further that the POV is a work product that is not necessarily based on first-hand

inspection, that it is not fully researched, that it is not intended for anything other than informational use, and specifically not intended for important tax or financial purposes, that it does not take into account specific market issues or trends, or any other important criteria that can affect value. It is only an opinion professionally rendered, but not duly and fully researched.

In order to protect the appraiser, the AAA recommends that the client signs an acknowledgment form in which

(i.) the professional services are clearly defined as to what they are and what they are not, and (ii.) the client waives any claim of any kind or nature against the appraiser arising from the POV.

As with formal appraisals, members of the Appraisers Association of America are prohibited in basing their fees for POVs on a percentage of the value of the object.

Potential Liability:

Notwithstanding such disclosure and waivers, the AAA counsels its members that there is potential liability in offering such services. Clients have been known to withhold information from appraisers and to hear only that which they wish to hear. Appraisers have been sued when clients are unable to sell their property at given value and appraisers have often been forced to defend frivolous charges, either through actual litigation or through complaints to ethics committees of professional associations. Defense of such complaints can be time consuming, emotionally exhausting and often, a financial burden.

Divergence from USPAP:

The AAA recognizes that under the Uniform Standards of Professional Appraisal Practice (USPAP) the type of work product referred to above as a POV constitutes an appraisal and as such should conform to USPAP. A POV as outlined above does not conform to USPAP.

The AAA has chosen to differ with the Appraisal Foundation and the Appraisal Standards Board (ASB) on this point and feels that it would be timely for the Appraisal Foundation to acknowledge that performance of such services should be permissible providing they are defined in the manner stated above.

In the past the Appraisal Foundation has received numerous requests from both real estate and personal property appraisers to recognize and to allow work products such as POVs, but to date it has taken no action in doing so.

While real estate appraisers are subject to state licensing criteria, personal property appraisers belong to a "self-regulated" profession with standards set by individual associations. While the AAA obliges all its members to write their appraisals according to USPAP, recognition of POVs as an acceptable work product, under the conditions outlined above, will allow AAA members to perform such services without professional sanction from the AAA.

February, 2001

USPAP Language for your Business Documents When you reference USPAP in any of your documents, you should not use the phrase "USPAP-certified" as this is NOT permitted by The Appraisal Foundation; you may use the phrase "USPAP-compliant" or even better, use the following phrase: "Successfully completed a 15-hour course and examination on the Uniform Standards of Professional Appraisal Practice (USPAP), the Congressionally-recognized set of appraisal standards promulgated by The Appraisal Foundation. Completed in DATE HERE, effective through DATE HERE (which is 5 YEARS after COMPLETION)."

LONG CASE STUDY 1 Connie Sewer, an Art History major in college and an NYU appraisal studies student, attended an onsite catalogued house auction for a large estate in Grosse Point, Michigan in 2002. The auction was conducted by Hugh Byatt Auctions, an established Chicago auction house. At the preview she saw a 19th century genre painting, signed Zampighi (Eugenio Zampighi, Italian genre painter, 1859-1944). Connie thought it rather sweet and investigated the work. She was told by an employee of the auction house that the painting had been in the family for many years. The deceased was 90 years old when he died. He had been ill for at least 15 years and done his collecting many years prior to his illness. She was also told that an "independent appraiser" was available for consultation. She should check the auction catalogue for the times he was scheduled to be onsite. Connie checked the catalogue and noted that the appraiser, Sly Himes, a senior member of ASA and a member of the AAA was scheduled to be at the house all afternoon. She returned in an hour and met with the appraiser. Himes provided her with a photocopied page of Zampighi's sales results from Hislops’ Art Sales Index. The auction records indicated that some of Zampighi works of comparable size had sold in the $20,000-40,000. range. Himes indicated that the painting was in pristine condition and had never been retouched. The painting was estimated at $15,000-25,000 in the catalogue. Himes told Connie that he felt the decedent's family would take a lower bid because they wanted to sell everything quickly. Himes also offered to write an appraisal for the painting after the sale at no charge. Connie was the underbidder at $7,500; she lost the painting to a phone bid. She returned home, momentarily disappointed, but quickly forgot about the sale. Three days later she received a phone call from Hugh Byatt Auctions. They told her that the successful bidder failed to pick up the painting and that it could be hers for her final bid - $7,500 plus the usual premium and tax. Connie was thrilled. She immediately got a cashier's check for the amount and picked up the painting. She returned home and examined the painting with her black light. She saw several areas of inpainting and noticed that the faces of the young couple were rather amateurishly executed and that the background was incomplete. The signature also looked wrong, but she could live with it. She felt that perhaps it was a work from Zampighi's younger days. She contacted the appraiser, Sly Himes, for the appraisal he generously offered at the auction. Six months later, after several phone, Himes sent Connie an appraisal on an [old, now obsolete] AAA-approved appraisal form. Meantime, Connie had taken the summer appraisal courses at NYU and noted that the appraisal lacked many required facts. Additionally, no CV was included, although Himes attached a copy of a local newspaper article featuring him as an appraiser. Connie questioned the appraisal since Himes had put a value of $60,000 on a painting for which she had only paid $7,500. He explained that “of course” the figure was much higher than the purchase price -- she got the painting "at a steal" and that insurance values are also inflated. He arrived at the $60,000 by doubling the high Hugh Byatt auction estimate and adding a slight inflationary factor.

Connie continued her research. On her next trip to New York, she brought the painting to Sotheby's and Christie's for their input. Each auction house indicated that it was a "lovely painting" in the manner of Zampighi, but not for them. Connie then contacted several Madison Avenue/57th Street galleries who sold similar 19th century genre paintings. No one seemed to be interested in her "$60,000" painting. However, one gallery told her that they thought the remembered seeing the painting in a sale at Skinner's or Sloan's in the late 1990's. Connie next contacted Skinner's and Sloan's. The painting had actually passed through both auction houses. It was in a 1998 sale at Sloan's and did not sell. In 2000 it appeared at a Skinner sale where she was told that it sold privately after the sale. In both catalogues, the auction houses had indicated that the paintings was "in the manner of Zampighi". The estimates were $1,000-1,500 (Sloan's) and $800-1,000 (Skinner). Connie has learned her lesson! Does she have any recourse? Who, if anyone, was in violation of USPAP in this case? Explain.

LONG CASE STUDY 2 Mr. Haney is the owner of a small, but respected antiques/collectible shop in New Market, Minnesota. New Market is the county seat for a large farming community in Southern Minnesota. Recently the area has become very popular with rich, young Minneapolitans who enjoy antiquing. Many old farm houses and estates have been bought by these "big city" yuppies as country and weekend homes. Haney is the only AAA appraiser in 150 miles. He has been a member of the AAA since 1965 when just starting out in the antiques business. Although his appraisal practice has never been a great source of revenue, it has led to a constant source of new merchandise. Haney follows the new AAA guidelines that he learned at the last AAA conference he attended in 1990. He always states that at the time of the appraisal he has no interest in the items appraised (although he knows that eventually they will come to him since he is the only "game" in town). In May 2000, Mr. Espender, one of the wealthy "yuppie" types that had moved into town was killed in a car accident, leaving a very pretty widow and three young children. Haney had known the family for the five years that they had lived in New Market, as he had sold them many of the antiques in their home. He was quite fond of the Espender family and his wife frequently babysat for the Espender children. Haney was retained to conduct the appraisal for the estate. He was told that the estate had to be liquidated quickly as the widow was left penniless. The attorney, Haney's first cousin, assured him that there were no tax consequences since there was a surviving spouse. The appraisal was done for capital gains purposes only. The attorney asked Haney if he wouldn't mind waiting to get paid for the appraisal until after some of the items were sold. He explained that the widow could barely cover the funeral expenses. Haney agreed -since he sold the family many of the items in the estate, he knew that the estate included many valuable and salable items. Haney had not realized the extent of the collecting the Espender family had done over the past few years. When he arrived onsite he discovered that the rambling farmhouse was filled with not only the country pieces that he had sold the family, but also some signed 19th century portraits and genre scenes, various American quilts and needlepoints, Chinese Export porcelain, silver, glass, furniture, and books. To his relief he was told that Mrs. Espender's jewelry was not part of the estate and he would not have to appraise it. Haney called his wife to help with the appraisal. They alternated rooms. After two 10 hour days they finished the onsite part of the appraisal. That weekend they went to the wedding of a friend's daughter. At the wedding they ran into an old acquaintance who is an antiques dealer in New York. This friend asked Haney if he ever sees old needlepoints for sale. Haney indicated that he is working on an appraisal of some at the moment. They will be priced in the $200-500 range. He said he could probably arrange a deal with the estate since he knew that they desperately needed money. He asked his friend to call him on Monday. Monday at the Chamber of Commerce meeting, Haney saw his cousin, the estate attorney. Haney asked the attorney when he could have access to the inventory. He had buyers for it immediately. The attorney indicated that he had to speak with the widow, but did not predict a problem. The

attorney suggested that Haney use photographs to begin to sell the goods if he could not immediately move them into his antiques shop. The attorney also suggested that Mrs. Haney could post items on ebay if Haney did not have the time. Meantime, Mrs. Haney was diligently typing the appraisal. About a week later she finished the report. During that time, Haney had returned to the Espender home to take photographs since he knew many of the pieces he could sell for the family quickly because he had buyers all over the county and he knew the estate needed the money quickly. Haney bought several items for his own collection in order to help out the widow. His friend from New York bought ten of the twelve needlepoints for $200 each. He sold several paintings and some candlesticks on ebay. Within two weeks, Haney had raised more than $40,000 for the estate and the widow was delighted. Haney continued to sell articles from the estate. Some he had in on consignment in his shop; others he kept at the widow's home until they were sold; some of the smaller items he posted on ebay for an easy sale. About eight months later, friends of the widow noticed that a portrait similar to a portrait they remembered at the Espender house was offered for sale at Susanin's in Chicago. This painting was reportedly by John Singleton Copley. The estimate was $100,000-125,000. They asked the widow if she knew anything about it. Mrs. Espender saw a photograph of the painting and realized that it was a painting that Haney had sold shortly after the death of her husband. She recalled that Haney had appraised the painting for $2,500 with the "off-the record" comment indicating that he thought the painting was probably worth much less, but did not want the widow to have to pay additional capital gains on a potential sale. Eventually she received $1,200 for the painting after Haney had taken his commission. She did not have to pay capital gains and she was pleased at the time. Mrs. Espender started to investigate other pieces that were sold. She found five of her needlepoints in a sale at Sotheby's in New York. One was sold for $8,000, others were in the $4-6000 range. She was paid $125 for each of them. She saw several of her quilts in a downtown Minneapolis folk art gallery with prices of $4-12,000. She was paid $100 per quilt by Haney. Needless to say, Mrs. Espender was livid. She called the Better Business Bureau and the AAA. She filed ethical complaints against Haney. To this day, Haney does not understand what he did wrong --- He was just trying to help the widow. Was Haney in violation of USPAP? Explain.

LONG CASE STUDY 3 Eve Nigh received a MA in Art History from Smith College in Northampton in 2000. After many months of looking for arts-related employment in the Western Massachusetts area, she found a job working for an antiques shop, called Tab Blue, which specialized in English and American country dining furniture in Great Barrington, Massachusetts. The shop's clientele was primarily weekenders and vacationers from Boston and New York. Frequently these customers ask for appraisals on their recent purchases. Eve seeing an opportunity, taught herself to do appraisals and started offering independent appraisals to those who inquired. Her appraisal practice became a very lucrative sideline business to her job in the antiques shop. Not only did she do appraisals for the Tab Blue, she was also hired by all of the galleries in town to do their clients' appraisals. The work was very easy since the dealers usually supplied her with descriptions and purchase prices of the items she appraised. She wrote the appraisals according to the generic format she copied from her parents' 1985 insurance appraisal and changed the descriptive facts. All was fine until in May 2003 when a Mrs. Ann Teak, a 2001 client whom Eve barely remembered, called to request a copy of the full appraisal to be sent to her insurance company. The client could not find her copy of the appraisal and stated that the insurance company requested it for a claim she was filing. Apparently, the client's son had a party while she was out of town and the table had several cigarette burns on the top. The client was filing an insurance claim for the restoration. Eve could not recall the specific table. She had disposed of her 2001 records at the end of 2002 when she moved. She was hoping that perhaps she could find the dealer who originally sold the client the table and she could reconstruct the appraisal. Eve explained the situation to all of her dealer friends in town, asking them to check their records for any sales to a Mrs. Teak from about 2001. Many of the dealers knew Mrs. Teak, but no one had a record of the sale. She went back to Mrs. Teak and told her that she could not help her because she was unable to find a record of the appraisal. Meantime, the insurance company had conducted an independent appraisal for the table. Their appraiser had indicated that the table was constructed of a 19th century maple base and a contemporary maple-stained pine top. The insurance company's appraiser felt that the table's total replacement value was $1,000. The cost to replace the top was $250 with no loss of value. The client was upset since she had recalled paying $6,500 for a “Federal” maple table. She went through her records and found a copy of the invoice for the table and Eve's appraisal. Mrs. Teak did pay $6,500 plus tax and shipping for the table in 2001. Eve had appraised the table for $9,500. Mrs. Teak would not accept the insurance company's offer. It was decided that she would go to litigation.

Eve's files, including her comparables were subpoenaed. Eve stated that she had disposed of her 2001 files at the end of 2002. The attorney, Justice Forell, was very nice and asked Eve to reconstruct an appraisal to the best of her ability. Mrs. Teak sent Eve a copy of the original sale's receipt so Eve could discuss the table with the dealer. The dealer, Tom Crook, had closed shop about six months ago and no record of a forwarding address existed. Eve's boss, a dealer in antique tables recalled that Crook frequently sold assembled tables to unknowing clients. No respected antiques dealer in Great Barrington wanted to associate with Crook. Eventually the word got around and his business ultimately suffered, hence his disappearance. Eve now remembered the appraisal. It was the only appraisal that she did for Crook. She remembered not liking to work with him. He insisted that she do the appraisal from a photograph and the information he supplied. She never actually saw the table. Crook had told Eve to put $9,500 on the table. At the time she thought that was too high, but if that's what the client had paid for it - it was a fair price. She did no further research as to comparables. Since the table was now in Boston, Eve suggested that the client get a second opinion from an appraiser in the Boston area. Eve offered to pay for the appraisal. Mrs. Teak got a second opinion which confirmed the insurance company's findings. Mrs. Teak's attorney, Forell, felt that Eve's appraisal would not hold up in court. Forell recommended that Mrs. Teak accept the insurance company's offer of $250 and take action against Eve. Mrs. Teak accepted the insurance company's offer and proceeded to sue Eve for the difference in the value between her appraisal and the second opinions, plus court costs, plus pain and suffering. The case was settled out of court. Was Eve in violation of USPAP? Explain.

APPRAISERS ASSOCIATION OF AMERICA, INC.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE, 2006

SHORT CASE STUDIES 1. One of your clients is "just interested in knowing" what a particular painting is worth.

The client would like you to write an abbreviated report. You suspect, however, that the client will attempt to sell the painting if the appraisal is high and will use your appraisal to justify the asking price. Under USPAP how should this be handled?

2. Your client has suffered a catastrophic loss in a fire and must submit an appraisal to

be reimbursed by the insurance carrier. After having contracted to do the job you arrive on the scene to discover that the client has hardly any documentation about the objects which have been lost, which is entirely different from the scenario presented to you on the phone. Under USPAP how should this be handled?

3. You have contracted to write a donation appraisal for works of art which have been donated to a museum. The museum staff is being very difficult and will not allow you to see the objects until after the appraisal must be filed with the client's income tax. Under USPAP how should you handle this situation?

4. You have been asked to appraise an artist's estate for estate tax purposes. After

completing a preliminary inventory you become convinced that a blockage discount should be applied. However, you have never written this type of appraisal before and not one of your colleagues has either. Under USPAP how should this be handled?

5. After researching a number of Renaissance paintings in a client's collection, you are

convinced that they have been stolen from a major museum. Do you have a fiduciary responsibility under USPAP? How should this situation be handled when writing your appraisal?

6. You have been told by a dealer, that an unpublished Impressionist painting included in an estate will be listed in the new edition of the artist's Catalogue Raisonné. You have contacted the expert who is writing the catalogue for confirmation and, after several follow-up phone calls, you still have not received a reply. Another dealer has now told you that the expert is very reclusive and does not return phone calls. The estate appraisal is due. According to USPAP how should this situation be handled?

7. You have been retained as an appraiser expert in an equitable distribution case. In completing your appraisal, written according to USPAP, you find that you cannot use the published definition of value listed in the Standards. How should this be handled?

8. After completing an estate appraisal, the executor who hired you has been so impressed by the quality of your USPAP appraisal that he now wants to retain your services to broker the collection. According to USPAP how should this be handled?

9. Nine months after the date of death, the estate appraisal is now due. However, you have not had time to complete it. The lawyer tells you not to worry and just submit an estimated value and complete the appraisal in due course. According to USPAP, how should this be handled?

10. You have been contacted by a judge’s assistant to submit a proposal for a large

divorce appraisal. After reviewing your proposal, a divorce attorney arranged an appointment for you to examine the collection. On the date of the appointment, you were met by the daughter of the divorcing couple. You completed your appraisal and were told to send the bill to an accountant. Who is your client? Explain.

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H-10

CONGRESS AND THE IRS SET THEIR SIGHTS ON “HIRED GUNS”

By Moira Sullivan Crabtree

SUMMARY

Prior to August 17, 2006, penalties for overstating the value of charitable deduction

property were aimed at taxpayers and tax preparers who either knew or should have known

that incorrect valuations were being used in tax returns. However, in 2006, Congress passed

legislation, the Pension Protection Act of 2006, P.L. No. 109-280, 120 Stat. 708 (2006), (“the Pension

Protection Act” or “the PPA”), that amended the Internal Revenue Code (“the Code”). Sec.

1219 of the PPA amended four sections of the Code (§§ 170, 6662, 6664 and 6696) and added a

penalty specifically targeted at appraisers who prepare appraisals that aid and abet taxpayers

in underpaying their taxes (I.R.C. §6695A). The PPA enacted new statutory definitions for

“qualified appraisal” and “qualified appraisers”. The PPA also reduced the threshold for

substantial and gross valuation misstatements for taxpayers who include on their tax returns any

valuation misstatements of property, both real and personal, that result in underpayments of

income tax and changed the threshold for valuation understatements of items reported on

estate and gift tax returns.

The Internal Revenue Service (“IRS” or “the Service”) and the Treasury Department

expect to issue new permanent regulations under § 170(f)(11) of the Code. Until those

regulations are issued, however, taxpayers and appraisers must use the Treasury Regulations

issued before August 17, 2006, as amended by the November 13, 2006 Internal Revenue Bulletin,

Notice 2006-46 to comply with the new Code provisions added by the PPA. A copy of this

Notice appears at the end of this section.

BACKGROUND

I.R.C. §170(a) generally permits charitable contributions deductions, subject to certain

limitations depending on the type of taxpayer, the nature of the property contributed, and the

type of donee organization. Section 170(f)(11) contains reporting and substantiation

requirements for allowable deductions for noncash charitable contributions. In particular, if a

taxpayer claims a deduction of more than $5,000 for donated property, he must obtain a

qualified appraisal and attach the appraisal summary to his tax return. If the contributed

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property is art valued at more than $20,000 or other property worth more than $500,000, he must

attach the qualified appraisal to the tax return.

Please Note: For appraisals prepared for returns filed on or before August 17, 2006,

existing Treasury Regulations provide a definition of the terms “qualified appraisal” and

“qualified appraiser” for purposes of §170(f)(11). For all tax returns filed after August 17, 2006,

the definitions in the Pension Protection Act apply.

The PPA was enacted on August 17, 2006. While the majority of the bill addressed

pension issues, tucked at the end under Title XII, are charitable giving incentives, provisions

aimed at reforming exempt organizations’ practices, increased penalties on taxpayers who

make valuation misstatements on their income, estate and gift tax returns and a new penalty on

appraisers who submit appraisals that result in substantial and gross valuation misstatements.

The penalty provisions address the situation in which an appraiser knew or should have known

that the taxpayer would use the appraisal in connection with his tax return. The PPA provisions

apply to all tax returns filed after August 17, 2006 and the appraisals attached to those tax

returns.

HOW CONGRESS TIGHTENED RESTRICTIONS ON APPRAISERS AND THEIR PRACTICES

QUALIFIED APPRAISALS

If a taxpayer donates tangible personal property worth more than $500, he must include

a description of that property with his tax return. Attaching IRS Form 8283 to the tax return

satisfies this requirement. A taxpayer must obtain a qualified appraisal for donated property

worth more than $5,000, and attach the summary of that appraisal to the tax return. If the

donated property is art valued at more than $20,000 or other property worth more than

$500,000, the taxpayer must attach the complete appraisal to the return.

Treasury Regulations issued before August 17, 2006 define a qualified appraisal. A

qualified appraisal complies with §170(f)(11) and Treas. Reg. §1.170A-13(c) if it:

(1) relates to an appraisal made within 60 days prior to the date of contribution

and not later than the due date (including extensions) of the return on which the

deduction is claimed;

(2) Is prepared, signed, and dated by a qualified appraiser;

(3) Includes:

(a) A description of the property appraised;

(b) The fair market value of the property on the date of contribution;

(c) The specific basis for the valuation;

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(d) A statement that the appraisal was prepared for income tax

purposes;

(e) The qualifications of the qualified appraiser; and

(f) The appraiser’s signature and taxpayer identification number; and

(4) Does not involve an appraisal fee that violates certain prescribed rules.

The post-August 17, 2006 transitional definition of “qualified appraisal” expands the definition of

“qualified appraisal” in the existing regulation by requiring that the appraisal be prepared by a

qualified appraiser according to generally accepted appraisal standards. Consequently, after

August 17, 2006 an appraisal will be treated as a qualified appraisal under § 170(f)(11)(E) if:

1) the appraisal complies with all the requirements of § 1.170A-13(c) of the

existing regulations [those listed above]; and

2) is prepared by a qualified appraiser in accordance with generally accepted

appraisal standards.

The Uniform Standards of Professional Appraisal Practice (“USPAP”), developed by the

Appraisal Standards Board of the Appraisal Foundation, is cited as an example of generally

accepted appraisal standards that will satisfy § 170(f)(11)(E)(i)(II).

QUALIFIED APPRAISER

Treas. Reg. §1.170A-13(c)(5)(i) defines a qualified appraiser as a person who:

1) Holds himself or herself out to the public as an appraiser or performs appraisals

on a regular basis;

2) Is qualified to make appraisals of the type of property being valued (as

determined by the appraiser's background, experience, education and

membership, if any, in professional appraisal associations);

3) Is independent; and

4) Understands that an intentionally false or fraudulent overstatement of the

value of the appraised property may subject the appraiser to civil penalties.

I.R.C. §170(f)(11)(E)(ii)(I) requires an appraiser have earned an appraisal designation

from a recognized professional appraiser organization, based on demonstrated competence

valuing the type of property in the appraisal. Furthermore, the appraiser must declare in the

4

appraisal that he is qualified to appraise this property because of his background, experience,

education, and membership in professional associations. See also § 1.170A-13(c)(5).

The transitional definition of a qualified appraiser in Notice 2006-46 is more stringent than

the definition in the existing Treasury Regulation; Notice 2006-46 must be followed for all

appraisals prepared for a tax return filed after August 17, 2006.

The minimum education requirements for an appraiser valuing personal property differ

for tax returns filed before and after February 16, 2007. Before February 16, 2007, an appraiser

meets minimum education and experience requirements to appraise the type of property being

valued if he satisfies the requirements of § 1.170A-13(c)(5) as listed above. For tax returns filed

thereafter, the appraiser must satisfy the new definition in §170. He must, with regard to the

property being valued (“the subject property”):

(1) have successfully completed college or professional-level coursework

relevant to the subject property;

(2) have at least two years’ experience in the trade or business of buying,

selling, or valuing property like the subject property; and

(3) fully describe in the appraisal his education and experience that

qualify him to value property like the subject property.

APPRAISER PENALTIES AND OVERSIGHT

There is well-established authority for the Secretary of the Treasury to impose penalties

on persons aiding and abetting the understatement of tax. Historically these provisions were

aimed at unscrupulous tax preparers.

A penalty can be imposed on a person who:

(1) aids, assists in or advises with respect to a tax return or other document;

(2) knows (or has reason to believe) that such document will be used in

connection with a material tax matter; and

(3) Knows that this would result in an understatement of tax of another person.

The penalty for submitting an unrealistic opinion is $250; and for willful and reckless

5

conduct, the penalty is $1,000. If the document relates to the tax return of a corporation, the

amount of the penalty is $10,000. These penalties remain in effect for tax preparers.

New Appraiser Penalty

The new section in the Code, § 6695A, “Substantial and Gross Valuation Misstatements

Attributable to Incorrect Appraisals,” imposes civil penalties on any appraiser who prepares an

appraisal used to support a tax position that results in a substantial or gross valuation

misstatement. Computing this new appraiser’s penalty is a two-step process:

1) take the greater of:

a. $l,000 or

b. 10% of the understatement of tax resulting from a substantial or gross

valuation misstatement.

2) Then take the lesser of:

a. the result in step 1 or

b. A maximum of 125 percent of the gross income derived from the appraisal.

For example, assume that the understatement in tax is $50,000 and that the appraiser earned

$20,000 for preparing the appraisal. Under step 1, the $5,000 (or 10% of the $50,000

understatement in tax) is greater than $1,000. Under step 2, $24,000 is 125% of the appraisal fee

($20,000 X 1.25 = $24,000). Because $5,000 is less than $24,000, the appraiser’s penalty is $5,000.

The penalty will not apply if the appraiser establishes that it was "more likely than not" that the

appraisal value was correct.

New Appraiser’s Declaration on Form 8283

When a person donates property and claims a deduction of more than

$5,000 per item or group of items, art valued at $20,000 or more, and any property for which a

$500,000 deduction is claimed, he must obtain a written appraisal and fill out Section B of the

Form 8283. Part I contains information on the donated property itself:

• description of type of donated property (art worth less than $20,000, art worth more than

$20,000, collectibles, and other types of property)

• description of the donated property;

• brief summary of the property’s overall condition when donated;

• appraisal fair market value;

• date of the contribution;

6

• date donor acquired the property;

• how donor acquired the property;

• donor’s cost or adjusted basis;

• amount received if a bargain sale

• amount claimed as a deduction.

In Part II, the donor is required to sign a declaration that identifies all donated items that

have an appraised value of not more than $500 per item.

Part III contains the appraiser’s binding declaration that reflects all changes in the PPA:

“I declare that I am not the donor, the donee, a party to the transaction in which the

donor acquired the property, employed by, or related to any of the foregoing persons,

or married to any person who is related to any of the foregoing persons. And, if regularly

used by the donor, donee, or party to the transaction, I performed the majority of my

appraisals during my tax year for other persons.

“Also, I declare that I hold myself out to the public as an appraiser or perform appraisals

on a regular basis, and that because of my qualifications as described in the appraisal, I

am qualified to make appraisals of the type of property being valued. I certify that the

appraisal fees were not based on a percentage of the appraisal property value.

Furthermore, I understand that a false and fraudulent overstatement of the property as

described in the qualified appraisal or this Form 8283 may subject me to the penalty

under section 6701(a) (aiding and abetting the understatement of tax liability). In

addition, I understand that a substantial or gross misstatement resulting from the

appraisal of the value of the property that I know, or reasonably should know, would be

used in connection with a return or claim for refund, may subject me to other penalty

under section 6695A. I affirm that I have not been barred from presenting evidence or

testimony by the Office of Professional Responsibility.”

Part IV is the acknowledgment that the donee must complete.

When a taxpayer claims a deduction of more than $5,000 for donated property, he must

attach the summary of the qualified appraisal to his tax return. If the contributed property is art

valued at more than $20,000 or other property worth more than $500,000, he must attach the

complete qualified appraisal to the tax return.

7

Disciplinary proceedings for taxpayer’s representatives:

The Secretary is also authorized to regulate the practice of any taxpayer representatives

(e.g. accountants and attorneys) before the Department of the Treasury ("Department”).

After notice and hearing, the Secretary is authorized to suspend or disbar from practice before

the Department or the Internal Revenue Service ("IRS") any representative who:

1) is incompetent or disreputable;

2) violates the rules regulating practice before the Department or the IRS; or

3) willfully and knowingly (with intent to defraud) misleads or threatens the person

being represented.

If any individual has had a civil penalty assessed against him for aiding and abetting the

understatement of tax, the Secretary can also prevent him from appearing before the

Department or the IRS to offer opinion evidence on the value of any property.

Disciplinary proceedings against appraisers: Section 1219 of the PPA extends these sanctions to

appraisers after notice and a hearing but before a civil penalty is assessed against the

appraiser. Disciplinary action may include:

1) suspending or barring an appraiser from:

a. preparing or presenting appraisals on the value of any property to the

Department or the IRS;

b. appearing before the Department or the IRS to offer opinion evidence on the

value of any property; and

2) Providing that the appraisals of any appraiser who has been disciplined have no

probative effect in any administrative proceeding before the Department or the

IRS.

TAXPAYER PENALTIES FOR USING AN IMPROPER APPRAISAL

Income tax returns: Accuracy-related penalties

Accuracy-related penalties are imposed on any taxpayer who underpays his income taxes

because of either:

8

1) Substantial valuation misstatement; or

2) Gross valuation misstatement.

For an accuracy-related penalty to be imposed, the understatement in income tax must

be at least $5,000 for an individual or $10,000 for a corporation.

A substantial valuation misstatement is any value that is at least 150% or more of the correct

value. I.R.C. §6662(e)(1)(A). The penalty for a substantial valuation misstatement is 20% of the

underpayment of tax. Assuming that the reported value is at least 150% or more than the correct

value, the 20% penalty is applied thusly:

Correct tax liability as determined by the IRS

- Tax liability originally reported by the taxpayer

= Underpayment of tax X 20% = substantial misstatement penalty

Or, $350,000 correct tax liability

- 200,000 tax liability reported

$ 150,000 understated tax liability

X 20%

$ 30,000 substantial misstatement penalty

The taxpayer’s deficiency is now $180,000 ($150,000 understated liability plus $30,000 substantial

misstatement penalty).

A gross valuation misstatement penalty is applied if the misstatement is at least 200% or more

of the correct value. The penalty for a gross valuation misstatement is 40% of the underpayment of

tax. Assuming that the claimed value is at least 200% or more of the correct value, the 40% penalty

is applied exactly like the 20% penalty:

Correct tax liability as determined by the IRS

- Tax liability originally reported by the taxpayer

= Understated tax liability X 40% = gross misstatement penalty

Or,

$450,000 correct tax liability

- 200,000 tax liability reported

$ 250,000 understated tax liability

X 40%

$ 100,000 gross misstatement penalty

The taxpayer’s deficiency is now $350,000 ($250,000 understated tax liability plus $100,000

substantial misstatement penalty).

Warning for the unwary: Whether the penalty is 20% for the substantial valuation

misstatement or 40% for the gross valuation misstatement, interest is compounded daily on both the

9

deficiency and penalty and is charged from the due date of the return. In some cases, by the time

the taxpayer is assessed, his final bill could be as high as three times the original liability.

Estate and gift tax returns: Accuracy-related penalties

Accuracy-related penalties are also imposed on estate and gift tax returns that contain

either substantial or gross valuation understatements. If the value of any property claimed on the

return is determined to be no greater than 65% of the correct value, there is a substantial estate or

gift tax understatement. A gross understatement on a gift or estate tax return is one that is no

greater than 40% of the correct value. As with the income tax returns, for an accuracy-related

penalty to be imposed, the understatement in tax must be at least $5,000 for an individual or $10,000

for a corporation. Similarly, the penalty for a substantial valuation misstatement is 20% of the

understatement in tax and for a gross valuation misstatement, the penalty is 40%.

Exceptions to applications of the accuracy-related penalties

Under prior law, no accuracy-related penalty could be imposed if there was a reasonable

cause for an underpayment and the taxpayer acted in good faith. Under present law, there is no

longer any “reasonable cause” exception to the valuation understatement of charitable

contribution property. Now, the only circumstance in which no penalty is imposed on the

substantial understatement attributable to the value of any charitable contribution property is if:

1) the claimed value is based on a qualified appraisal made by a qualified appraiser; and

2) the taxpayer made a good faith investigation of the property’s value.

CONCLUSION

These provisions have a dramatic impact on appraisers and their professional practices.

Not only will the appraiser and his appraisal come under increased IRS scrutiny, any appraiser

who acts as a “hired gun” (giving the taxpayer whatever value he requests) risks losing the

ability to practice before the IRS for 3 years and paying a penalty that can be as much as

125% of the appraiser’s income earned preparing the appraisal.

In addition, these tightened restrictions on taxpayers and the appraisals used to support

the claimed tax deductions can also expose an appraiser to a lawsuit by the taxpayer who can

then claim “I relied on your appraisal and now the IRS has disallowed the value of the items you

appraised.” So, not only can the appraiser lose the income earned (+ an additional 25%), the

taxpayer could possibly sue to force the appraiser to pay his client’s additional tax, the penalties

10

and interest on the taxpayer’s deficiency (and perhaps the attorneys’ fees and court costs).

These potential consequences hardly make it worthwhile to be a “hired gun.”

Part III - Administrative, Procedural, and Miscellaneous Guidance Regarding Appraisal Requirements for Noncash Charitable Contributions Notice 2006-96 SECTION 1. PURPOSE

This notice provides transitional guidance relating to the new definitions of

“qualified appraisal” and “qualified appraiser” in § 170(f)(11) of the Internal Revenue

Code, and new § 6695A of the Code regarding substantial or gross valuation

misstatements, as added by § 1219 of the Pension Protection Act of 2006, Pub. L. No.

109-280, 120 Stat. 780 (2006) (the “PPA”).

The Service and the Treasury Department expect to issue regulations under

§ 170(f)(11). Until those regulations are effective, taxpayers may rely on this notice to

comply with the new provisions added by § 1219 of the PPA.

SECTION 2. BACKGROUND

A deduction for charitable contributions is generally permitted under § 170(a),

subject to certain limitations depending on the type of taxpayer, the nature of the

property contributed, and the type of donee organization. Section 170(f)(11), as added

by § 883 of the American Jobs Creation Act of 2004, Pub. L. No. 108-357, 118 Stat.

1418 (2004), contains reporting and substantiation requirements relating to the

allowance of deductions for noncash charitable contributions. In particular, under

§ 170(f)(11)(C), taxpayers are required to obtain a qualified appraisal for donated

2

property for which a deduction of more than $5,000 is claimed. Under § 170(f)(11)(D),

in certain cases the qualified appraisal must be attached to the tax return. For

appraisals prepared with respect to returns filed on or before August 17, 2006, existing

Treasury Regulations provide a definition of the terms “qualified appraisal” and “qualified

appraiser” for purposes of § 170(f)(11).

Section 1219 of the PPA amends § 170(f)(11)(E) and provides statutory

definitions of a qualified appraisal and qualified appraiser for appraisals prepared with

respect to returns filed after August 17, 2006.

Section 170(f)(11)(E)(i) provides that the term “qualified appraisal” means an

appraisal that is (1) treated as a qualified appraisal under regulations or other guidance

prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance

with generally accepted appraisal standards and any regulations or other guidance

prescribed by the Secretary.

Section 170(f)(11)(E)(ii) provides that the term “qualified appraiser” means an

individual who (1) 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, (2) regularly performs

appraisals for which the individual receives compensation, and (3) meets such other

requirements as may be prescribed by the Secretary in regulations or other guidance.

Section 170(f)(11)(E)(iii) further provides that an individual will not be treated as a

qualified appraiser unless that individual (1) demonstrates verifiable education and

experience in valuing the type of property subject to the appraisal, and (2) has not been

3

prohibited from practicing before the Internal Revenue Service by the Secretary under

§ 330(c) of Title 31 of the United States Code at any time during the 3-year period

ending on the date of the appraisal.

Section 1219 of the PPA also adds a new penalty provision. If the claimed value

of property based on an appraisal results in a substantial or gross valuation

misstatement under § 6662, a penalty is imposed by new § 6695A on any person who

prepared the appraisal and who knew, or reasonably should have known, the appraisal

would be used in connection with a return or claim for refund.

SECTION 3. TRANSITIONAL GUIDANCE

.01 In general

The Service and the Treasury Department expect to issue regulations under

§ 170(f)(11), as amended by the PPA. The terms in section 3 of this notice apply to

contributions of property (other than readily valued property within the meaning of

§ 170(f)(11)(A)(ii)(I)) by individuals, partnerships, or corporations for which a deduction

of more than $5,000 is claimed on returns filed after August 17, 2006, and before the

effective date of the regulations that the Service and the Treasury Department expect to

issue. Until regulations are effective under § 170(f)(11), as amended by the PPA, an

appraisal that meets the requirements of this notice shall be treated as a qualified

appraisal for purposes of § 170(f)(11). The determination of whether an appraiser is

qualified under section 3.03 of this notice must be based on the appraiser’s

qualifications as of the date the appraisal is made.

.02 Transitional terms-qualified appraisal

4

(1) Qualified appraisal. An appraisal will be treated as a qualified

appraisal within the meaning of § 170(f)(11)(E) if the appraisal complies

with all of the requirements of § 1.170A-13(c) of the existing regulations

(except to the extent the regulations are inconsistent with § 170(f)(11)),

and is conducted by a qualified appraiser in accordance with generally

accepted appraisal standards. See sections 3.02(2) and 3.03 of this

notice.

(2) Generally accepted appraisal standards. An appraisal will be

treated as having been conducted in accordance with generally accepted

appraisal standards within the meaning of § 170(f)(11)(E)(i)(II) if, for

example, the appraisal is consistent with the substance and principles of

the Uniform Standards of Professional Appraisal Practice (“USPAP”), as

developed by the Appraisal Standards Board of the Appraisal Foundation.

Additional information is available at http://www.appraisalfoundation.org.

.03 Transitional terms – qualified appraiser

(1) Appraisal designation. An appraiser will be treated as having

earned an appraisal designation from a recognized professional appraiser

organization within the meaning of § 170(f)(11)(E)(ii)(I) if the appraisal

designation is awarded on the basis of demonstrated competency in

valuing the type of property for which the appraisal is performed.

(2) Education and experience in valuing the type of property. An

appraiser will be treated as having demonstrated verifiable education and

5

experience in valuing the type of property subject to the appraisal within

the meaning of § 170(f)(11)(E)(iii)(I) if the appraiser makes a declaration in

the appraisal that, because of the appraiser’s background, experience,

education, and membership in professional associations, the appraiser is

qualified to make appraisals of the type of property being valued. See

also § 1.170A-13(c)(5).

(3) Minimum education and experience. An appraiser will be

treated as having met minimum education and experience requirements

within the meaning of § 170(f)(11)(E)(ii)(I) if –

(a) For real property

(i) For returns filed on or before October 19, 2006,

the appraiser is qualified as a “qualified appraiser” within the

meaning of § 1.170A-13(c)(5) to make appraisals of the type

of property being valued.

(ii) For returns filed after October 19, 2006, the

appraiser is licensed or certified for the type of property

being appraised in the state in which the appraised real

property is located.

(b) For property other than real property –

(i) For returns filed on or before February 16, 2007,

the appraiser is qualified as a “qualified appraiser” within the

meaning of § 1.170A-13(c)(5) to make appraisals of the type

6

of property being valued.

(ii) For returns filed after February 16, 2007, the

appraiser has (A) successfully completed college or

professional-level coursework that is relevant to the property

being valued, (B) obtained at least two years of experience

in the trade or business of buying, selling, or valuing the type

of property being valued, and (C) fully described in the

appraisal the appraiser’s education and experience that

qualify the appraiser to value the type of property being

valued.

.04 Applicability of reporting and substantiation regulations

(1) In general

The requirements of § 1.170A-13(c) of the existing regulations concerning

qualified appraisals and qualified appraisers continue to apply to all taxpayers, including

those to whom the transitional guidance in this section may apply, except to the extent

the regulations are inconsistent with the provisions of § 170(f)(11). In particular, all

taxpayers are required to comply with §§ 1.170A-13(c)(3), (c)(5), (c)(6) and (c)(7).

(2) Revision to appraiser declaration

For returns filed after February 16, 2007, the declaration required under

§ 1.170A-13(c)(5)(i) must include an additional statement that the appraiser

understands that a substantial or gross valuation misstatement resulting from an

appraisal of the value of property that the appraiser knows, or reasonably should have

7

known, would be used in connection with a return or claim for refund, may subject the

appraiser to a civil penalty under § 6695A. See also § 1.170A-13(c)(3)(iii).

SECTION 4. REQUEST FOR COMMENTS

The Service and the Treasury Department invite comments containing

suggestions for future guidance under § 170(f)(11), including regulations. In

particular, comments are requested concerning the definition of the following

terms: (1) "generally accepted appraisal standards” in § 170(f)(11)(E)(i)(II); (2)

"appraisal designation from a recognized professional appraisal organization” in

§ 170(f)(11)(E)(ii)(I); (3) "minimum education and experience requirements” in

§ 170(f)(11)(E)(ii)(I); and (4) “verifiable education and experience in valuing the

type of property subject to the appraisal” in § 170(f)(11)(E)(iii)(I). Comments also

are requested on the potential impact any guidance under § 170(f)(11) may have

on small businesses. Comments should refer to Notice 2006-96 and be

submitted by January 17, 2007, to:

Internal Revenue Service P.O. Box 7604 Ben Franklin Station Washington, D.C. 20044 Attn: CC:PA:LPD:PR Room 5203 Alternatively, comments may be submitted electronically via e-mail to the following

address: [email protected]. All comments will be available for

public inspection and copying.

SECTION 5. PAPERWORK REDUCTION ACT

The collections of information in this notice have been reviewed and approved by

8

the Office of Management and Budget (OMB) in accordance with the Paperwork

Reduction Act (44 U.S.C. 3507) under control number 1545-1953.

An agency may not conduct or sponsor, and a person is not required to respond

to, a collection of information unless the collection of information displays a valid OMB

control number.

The collections of information in this notice are in section 3 of this notice. The

collections of information are required from donors to satisfy the substantiation

requirements of § 170(f)(11). The collections of information are required from donors to

obtain a benefit. The likely respondents are individuals, partnerships, and corporations.

The estimated total annual reporting burden is 161,571 hours.

The estimated annual burden per respondent varies from 5 minutes to 5 hours,

with an estimated average of approximately 3.5 hours. The estimated number of

respondents is 46,285.

The estimated annual frequency of responses (used for reporting requirements

only) is once per year.

Books or records relating to a collection of information must be retained as long

as their contents may become material in the administration of any internal revenue law.

Generally, tax returns and return information are confidential, as required by § 6103.

SECTION 6. DRAFTING INFORMATION

The principal author of this notice is Susan J. Kassell of the Office of Associate

Chief Counsel (Income Tax & Accounting). For further information regarding this notice

contact Susan J. Kassell at (202) 622-5020 (not a toll-free call).

SAMPLE REPORT -FOR DONATION

USPAP DOES NOT

DICTATE FORM,FORMAT OR STYLE

1

Appraiser’s nameAddressPhone1

MR. AND MRS. SAM PULL - FAMOUS UNIVERSITY ART MUSEUM2 3

2008 SELF-CONTAINED “FAIR MARKET VALUE” DONATION APPRAISAL PAGE 1 OF 344 5 6 7 8

APPRAISERS’ CERTIFICATION9

COMPANY NAME is a registered firm of appraisers qualified to appraise personal property

including fine art and antiques. The appraiser signed below, APPRAISER NAME, AAA,

holds herself out to the public as a professional appraiser of Fine Art, including

Contemporary Art as included in this appraisal document. APPRAISER NAME is not now10

nor has ever been disqualified by the IRS from preparing IRS appraisals.11

Although the appraiser has appraised similar objects for other clients, to the

appraiser’s knowledge, this is her first association with these particular objects.12

The appraiser did not examine the artwork, however has carefully examined information

and images of the articles listed herein. Valuation is based solely on personal13

research and analysis of comparative market data as performed by the appraisers and14

office assistants at COMPANY NAME. No other party was significant in the valuation of

the appraised property. Although the statements of fact contained in this report are15

true and correct , the reported analyses, opinions, and conclusions are limited only16

by the reported assumptions and limiting conditions . The values expressed herein are17

based on the appraisers’ best judgement and opinion and are not a representation or

warranty that the items will realize that value if offered for sale in an appropriate

market within the United States .18

The appraiser, without any past, present, or contemplated future interest or bias19

which might tend to prevent a fair and objective appraisal declares the current fair

market value of each item.20

Compensation for this appraisal is not contingent upon the arrived valuation . Fee21

is based on a discounted (15% professional courtesy) hourly rate plus expenses. No22

person, group, or organization was given a fee in connection with the procurement of

this appraisal assignment. Further, compensation is not contingent upon the reporting23

of a predetermined value or direction in value that favors the cause of the

client/donor, the amount of the value estimate, the attainment of a stipulated result,

or the occurrence of a subsequent event.24

The objective of this report is to provide an unbiased fair market value guideline and

a basis for charitable donation evaluation . The appraiser understands that this25

appraisal will be used in connection with a tax return or claim for refund, and a

substantial or gross valuation misstatement resulting from this appraisal may subject

me to a civil penalty under Section 6695A of the Internal Revenue Code.26

According to the client/donor named at the top of every page of this report, the

articles listed herein are to be given free and clear, without restrictions, to the

permanent collection of the Famous University Art Museum, Famous City, Famous State (an

IRS qualified non-profit charitable organization) (See Exhibit 1).27

Digital images are included as references in the event of an audit by the Internal

Revenue Service. The client/donor is responsible for obtaining the appropriate

photographs as requested by the Internal Revenue Service. The Famous University Art28

Museum is responsible for obtaining and filing the appropriate IRS form 8283, if and

when applicable.

(Continued on Page 2)


USPAP DOES NOT


Appraiser’s nameAddressPhone

MR. AND MRS. SAM PULL - FAMOUS UNIVERSITY ART MUSEUM

2008 SELF-CONTAINED “FAIR MARKET VALUE” DONATION APPRAISAL PAGE 2 OF 34

2

APPRAISERS’ CERTIFICATION(Continued from Page 1)

The appraiser did not examine the donated articles due to their location . However,29

the appraiser viewed three (3) colored digital images of the work and discussed the

current condition of the articles with Mr. Art, a trained art professional and Mr.

Master, the Assistant Curator of Western Art at the Famous University Art Museum

(Exhibit 2). As such, the appraiser does not feel that the reported values of the work

in this report has been compromised in any manner due to the absence of the personal

examination.

Appraiser valued two (2) articles of Fine Art as designated by client/donor for this

recipient in 2008.

This report has been written according to the rules of the 2008 USPAP (Uniform Standard

of Professional Appraisal Practice) . This appraisal is considered to be a30

“retrospective” self-contained appraisal report as the appraiser conducted her31 32

research during the Fall of 2008, 9-10 months after the donation had been accepted.

Although the appraiser conducted her research in Fall 2008, the effective valuation

date is the “retrospective” January 2008 date.

Although these certification pages include salient information regarding the

methodology of the report, additional information regarding the scope of work,

assignment conditions, and disclaimers are important to understand the entire appraisal

process. As such, the entire report is required to fully understand the assignment and

this certification page encompasses the entire report and is not valid without reading

and understanding the entire report.33

Total pages of report: ##34

Total number of articles appraised: #

Total number of photographs and/or digital images: #35

Total number of exhibits: #

Examination date: DID NOT EXAMINE36

Research dates: September 20 - October 10, 200837

Date of donation: January 20, 200838

Effective valuation date: January 20, 200839

Issue date of the report: October 12, 200840

APPRAISER NAME, AAA41

Appraisers Association of America,

Certified Member42

ID# -----------43


USPAP DOES NOT





3

APPRAISERS’ CV 44


USPAP DOES NOT





4

TABLE OF CONTENTS45

Appraisers' Certification Pages 1 - 2

Appraiser’s Qualifications Page 3

APPRAISER NAME, AAA Page 3

Table of Contents Page 4

Scope of Work: Appraisal Method and Definition of Value Pages 5 - 9

Explanation of Authorship and Attribution Page #

Disclaimers, Limiting Conditions & Assumptions Pages ## - ##

Market Analysis Page ##

Total Value Page ##

Donated Item

Article 1 - XXXXXXXX Page ##

Famous Artist Pages ## - ##

Comparable Sales and Offerings for XXXXXXXX- Auction Sales Pages ## - ##

Valuation for XXXXXXXX Page ##

Donated Item

Article 2 - MMMMM Pages ## - ##

Comparable Sales and Offerings for MMMMM

Auction Sales and Retail Sales Page ##

Valuation for MMMMM Page ##

Sources Page ##

References Books and Price Guides Page ##

Galleries, Experts, Auctions, Internet Sites Page ##

Digital Images Follows report

Exhibit 1 - Deed of Gift from the Famous University Art Museum

signed January 20, 2008 Follows report

Exhibit 2 - Mr. Master, the Assistant Curator of Western Art at the Famous

University Art Museum email dated October 1, 2008 Follows report

Exhibit 3 - Mission Statement of the Famous University Art Museum as indicated

on their website: http://famousmuseum.edu/about/ Follows report

Exhibit 4 - Photocopy of Bid It Ups’ auction catalogue:

Modern and Contemporary Works of Art, Bid it Up Auction,

Anytown, Any State; Sale - January 12, 2003 Lot 121 Follows report

http://(http://artmuseum.princeton.edu/about/


USPAP DOES NOT





http://artmuseum.Famous.edu/about/1

5

SCOPE OF WORK: APPRAISAL METHOD AND DEFINITION OF VALUE46

PROBLEM TO SOLVE : The appraiser was asked to appraise one (1) painting, XXXXXXXX, by47

Famous Artist and a suite of three (3) lithographs, MMMMM, by various artists which

have been donated to the Famous University Art Museum, Famous City, Famous State. The

client/donor requires this appraisal as they will be taking a deduction from their

2008 Federal Income Taxes based on the appraised value of the contribution. This

appraisal will be sent to the client/donor. The client/donor will be advised to send

a copy of this appraisal to the Famous University Art Museum and to keep a copy of the

report with their taxes for submission upon request.

CATEGORY OF ITEM S EXAM INED : Contemporary art.48

CLIENT : Owners/donors of the artwork, Mr. and Mrs. Sam Pull.49

OW NERS OF THE ARTW ORK : Mr. and Mrs. Sam Pull.50

USE OF APPRAISAL : Charitable Contribution / Taxation.51

USER(S) OF APPRAISAL : This appraisal can be used and relied upon by the clients/donors,52

their designated attorney and/or accountant, the Famous University Art Museum, and the

Internal Revenue Service. Any other user is considered an unintended user.

APPRAISER’S PAST EXPOSURE TO APPR A ISED OBJECTS: To the appraiser’s knowledge and

recollection, this is her first association with these particular objects.

RELATED USE : The primary mission of the Famous University Art Museum is to53

effectively support and enhance the university’s goals of teaching, research, and

service. The donation of XXXXXXXX by ------ will enhance the museum’s collection of

Abstract Expressionists work and is available for Art Historical studies. The

donation of the MMMMM portfolio is an economy-inspired work which will speak to the

Political Science, Economics, History, as well as the Art History Department. The

museum also has a clear commitment to serve the local community, the region, and

beyond. The museum encourages the public to benefit from its art collections and

frequent exhibitions and to provide support for its principal activities through

specific programs and outreach initiatives. Scholarly exhibitions, publications,

symposia, and an active loan program extend the museum’s reach to a national and

international audience, assuring its continuing vitality and its active participation

in the university’s primary commitment to advance and impart knowledge. (Exhibit 3)1

.

EFFECTIVE / VALUATION DATE OF APPRAISAL : The value expressed in this appraisal is effective54

on the date listed on the Deed of Gift from the Famous University Art Museum, Famous

City, Famous State, signed January 20, 2008 (Exhibit 1).

OW NERSHIP INTEREST / ART LOSS REGISTER : The question of title was not an issue. As such,55

the appraiser did not perform Art Loss Register Inquiries. Client provided the

appraiser with detailed invoices for both works.



USPAP DOES NOT





6

SCOPE OF WORK: APPRAISAL METHOD AND DEFINITION OF VALUE(Continued from Page 5)

AUTHENTICITY : Although the appraiser is not an authenticator, the appraiser had no56

reason to doubt the authenticity of the works. Client provided the appraiser with

detailed invoices for both works, each indicating correct catalogue raisonné

information.

GENERAL ASSIGNM ENT CONDITIONS : The appraiser did not examine the appraised works. This57

appraisal is based on information supplied to the appraiser by the client/donor, the

Famous University Art Museum, and through personal research.

The appraiser was given adequate time to research the items. Appraiser was given

minimal documentation for these articles.

SPECIFIC ASSIGNM ENT CONDITIONS (ASSUM PTIONS) : The appraiser assumes the mediums to be as58

reported. A scientific analysis of the chemical compounds of the supports or pigments

was not conducted as it was not an issue relating to valuation.

SPECIFIC ASSIGNM ENT CONDITIONS (EXTRAORDINARY ASSUM PTIONS) : The appraiser did not examine the59

donated articles due to their location. However, the appraiser viewed digital

photographs of the works as well as discussed the condition of the work with Art

Proff, a trained art professional and Vincent Van Went, the Assistant Curator of

Western Art at the Famous University Art Museum (Exhibit 2).

Appraiser was given minimal documentation for these articles.

The appraiser assumes information provided by the client/donor to be correct.

The appraiser assumes the subject works will be the work donated to the museum.

The appraiser assumes authorship to be authentic .60

The appraiser assumes these works were previously traded in an appropriate market

without any unusual market stimuli affecting its sale or transaction .61

The appraiser assumes the clients/donors retained full title to the works immediately

prior to the gift.62

SPECIFIC ASSIGNM ENT CONDITIONS (LIM ITING CONDITIONS) : This report is limited to the63

information provided by the clients/donors (This is also considered an extraordinary

assumption).

This report is limited by the examination from a photograph (This is also considered

an extraordinary assumption).



USPAP DOES NOT





7


The appraiser is not a conservator as such did not prepare a condition report. This

appraisal is limited by the appraiser’s visual inspection of the photographs and the

input from the client and the Famous University Art Museum (Exhibit 2). No other

condition report was supplied.64

SPECIFIC ASSIGNM ENT CONDITIONS (HYPOTHETICAL CONDITIONS) : This report is based on the65

hypothetical existence of the artwork and the validity of the condition and facts

presented by the clients/donors and the Museum.

EXAM INATION AND M ETHOD OF EXAM INATION : The appraiser examined all available66

documentation relating to the work. She did NOT personally examine the artwork.

The appraiser was able to ascertain medium, style, and quality of work from the

photograph, supporting documentation, and discussions with client/donor’s agent. All

measurements were provided by the museum or standard reference material (as

indicated).

The appraiser assigned a general condition report to the object based on the

examination of the photographs and the documentation (Exhibit 2). “Condition” refers

to what is considered generally acceptable, with ordinary wear and tear for its type,

unless otherwise noted. Condition comments are limited to variations of good, fair,

and poor.67

PHOTOGRAPHY/DIGITAL IM AGERY : Three (3) digital color images of the works were supplied68

by the Museum. The client supplied the appraiser with a color photo-copy of the Bid

it Up auction catalogue where the painting was purchased. To the appraiser’s

knowledge, these photographs/photocopies/digital images have not been altered or

modified. The appraiser is not responsible for any alterations or modification, if

any exist.

The client is responsible for obtaining the regulation size photographs as required

by the IRS.

M ETHOD OF RESEARCH : Research was conducted in the offices of COMPANY NAME. The69

office is equipped with an extensive library of over 10,000 research books and auction

catalogues. Additional research was conducted on the Internet using standard search

engines as well as pricing data bases to which COMPANY NAME subscribes (including

ArtNet, ArtFact, ArtPrice, AskArt, ArtInfo, and Gordonsart). Appropriate galleries

and auction houses were contacted for information when necessary. No outside library

or museum research was conducted for this specific appraisal. Specific sources and

Internet sites are listed at the end of the report.



USPAP DOES NOT





2

The Gramm-Leach-Bliley Act, passed in 1999 and fully effective in July, 2001,

addressed overall financial industry reforms as well as emerging consumer privacy

and security issues. Officially called the “Financial Modernization Act of

1999”, it affects the technology and information system policies used by anyone

engaged in providing financial services either directly or indirectly to

consumers. Appraisers are specifically named as institutions required to follow

the stipulations of the law.

8


The clients/donors provided the appraiser with minimal primary information regarding

the artwork.

The appraiser was given adequate time to research the items.

TYPE OF APPRAISAL : This report is considered to be a “retrospective” self-contained70

appraisal report according to the rules of the 2008 USPAP (Uniform Standard of

Professional Appraisal Practice). Specific comparables not included in this report

are held in the clients’/donors’ files at COMPANY NAME. Specific comparable retail

sales history is confidential according to the Gramm, Leach, Bliley Act and cannot2

be disclosed without the owner’s permission. However, the appraiser has noted general

conversations in the client’s file in the offices of COMPANY NAME. The client file

is available for the clients, the clients’ representatives, and/or the IRS (with the

clients’ permission) to examine upon request. This information will be kept by

COMPANY NAME for a minimal period of five (5) years after the date of issue or two (2)

years after final disposition of any judicial proceedings involving the appraiser,

whichever period expires last.

APPROACH TO VALUE : The appraiser named on the cover page of this document employed71

the "market comparison" approach to arrive at the appraised "fair market value". The

"income" approach and the "cost" approach are not applicable to this particular

appraisal.

M ARKET EXAM INED : The "market comparison" approach analyzes recent sales of comparable72

articles at appropriate major international and regional fine art auctions, private

and public sales, shows and exhibitions, as well as prevailing prices at retail shops

and galleries where the article may normally be traded. For this particular

appraisal, the appraiser examined the American gallery and auction markets.

Adjustments are then made for each article which consider age, condition, rarity,

artistic merit, technical workmanship, current trends and availability of an article

as compared to such recent sales.



USPAP DOES NOT





9


TYPE OF VALUE USED : Fair Market Value.73

DEFINITION OF VALUE : Appraised “fair market value” as defined by IRS Section 1.170 and74

20.2031 (b) is "the price at which the property would change hands between a willing

buyer and a willing seller, neither being under any compulsion to buy or to sell and

both having reasonable knowledge of relevant facts." (According to Technical Advisory

Memorandum 9235005 (May 27, 1992), fair market value should include the buyer's

premium.) 20.2031 (b) continues "the fair market value of an item of property

includible in the decedents's gross estate is not to be determined by a forced sale

price. Nor is the fair market value of an item of property to be determined by the

sale price of that item in a market other than that in which such item is commonly

sold to the public, taking into account the location of the item wherever appropriate.

Thus, in the case of an item of property includible in the decedent's gross estate,

which is generally obtained by the public in the retail market, the fair market value

of such an item of property is the price at which the item or a comparable item would

be sold at retail." (Treasury Regulation Section 1.170A-13©)(3)(1988)

SOURCE FOR VALUE DEFINITION : IRS Section 1.170 and 20.2031 (b) and Treasury Regulation75

Section 1.170A-13©)(3)(1988)

USPAP COM PLIANCY : The report was written by APPRAISER NAME, AAA whose USPAP76

qualification with the AAA is valid until 2009.

This appraisal report follows the guidelines of USPAP in that the report provides all

of the necessary information/analysis to satisfy the “retrospective” report

development requirements as defined in Standard 7 (Personal Property, Development) and

the writing requirements of a Self-contained Appraisal as defined in Standard 8

(Personal Property, Reporting).


USPAP DOES NOT





10

EXPLANATION OF AUTHORSHIP AND ATTRIBUTION77

AUTHORSHIP GLOSSARY

Title - If a generally accepted title for the work exists, that

title is given. If the work is untitled or the title is unknown, a

descriptive title may be assigned and is indicated with an asterisk

(*).

When provenance is unknown and a search of reliable sources fails to

render information concerning a particular artist or work involved,

a value determination is based on artistic merit and market

conditions.

Authorship - When a work is unsigned but generally accepted in the

scholarly community to be by a particular artist, that artist's name

will be indicated as "Ascribed to...". This is the highest category

of authenticity.

When a question of doubt concerning authorship prevails, the

authorship will be indicated as "Attributed to..." a particular

artist or a school.

When a signature exists on a work, but the work does not appear to

be by the hand of such signed artists, the appraiser will indicate

that the work "Bears signature of...". This means that the

appraiser does not believe the work to be by the "signed" artist.


USPAP DOES NOT





11

GLOSSARY OF TERMS APPLICABLE TO THIS REPORT78

buyer's premium - a percentage of the bid ("hammer") price at an auction; can

range 5 - 25%.

canvas size - the actual size of a work on canvas where the edges are visible.

catalogue raisonné - a scholarly catalogue which should include all the known

works by an artist at the time of compilation; includes essential information

by which works are identified; the definitive reference book.

estimate (est.) - the pre sale dollar amount suggested by an auction house at

which an object is expected to fetch at auction

expressionist - a style of art characterized by distortions of line, shape, and

color based on an emotional reaction of the artist

hammer price - the actual "bid" price at an auction; does not include the

premium

impasto - paint applied with the consistency of thick paste

o/c - oil on canvas

photo-offset lithograph - is the most common way to print limited edition art,

posters, magazines, catalogs, brochures and most other color images on paper.

It is a mechanical four color press process; often a form of transfer printing.

reserve - the agreed upon minimal amount at which an item can be sold at

auction

seller's premium - a percentage of the bid ("hammer") price at an auction;

usually 5 - 15%. It is usually more negotiable than the buyer's premium.

TAM - Tax Advisory Memorandum

watermark - design left in the paper by the paper manufacturer; seen when held

against the light; used to trace the origin of the paper; special markings for

an artist or publisher may incorporate a signature or a device; can be used to

detect fakes -- although it can be faked.

work size - the actual size of a work on board or paper where the edges are

visible

unsold - an artwork that did not sell at auction. The most common reason items

are unsold is because the item failed to reach its reserve (AKA “buy-in”,

“bought-in”, or “bi”). Other reasons an item is unsold could be that the item

was withdrawn based on ownership or authenticity, or that the consigner changed

their minds.




12

DISCLAIMERS, LIMITING CONDITIONS AND ASSUMPTIONS79

This certificate of appraisal is given, subject to the terms and conditions

hereinafter set forth, all of which are a part hereof unless expressly set aside

in writing either on the pages of this certificate or by writing attached to the

certificate signed by all parties concerned.

This appraisal consists of 27 (plus 4 exhibits) pages and must be presented in

its entirety to be valid.

This appraisal is prepared solely for charitable contribution purposes using80

the comparative market approach to arrive at the fair market value as of81 82

January 20, 2008. It is to be used solely by Mr. and Mrs. Sam Pull and their83

agents (accountants, attorneys) for income tax purposes. This report can be84 85

relied upon by the Internal Revenue Service and the Famous University Art86

Museum .87

The client shall indemnify, defend, and hold us harmless from and against all

actions, claims, liabilities or expenses incurred as a result of claims based on

or arising from the appraisal, by third parties unrelated to the immediate purpose

of this appraisal.88

Unless otherwise stated herein, this certificate is based only on the readily

apparent identity of the items appraised, and no further opinion nor guarantee of

authenticity, genuineness, attribution, or authorship is made . However, in89

appraising the subject articles, the appraiser found no reason to question the

authenticity of the articles, unless as indicated in the individual description.

The appraiser did not personally examine the artwork. All descriptive information

pertaining to the work was supplied by the client, the Famous University Art

Museum, and/or through standard reference material and the Internet. No reported

scientific and/or laboratory testing has been performed on any works.

Unless otherwise stated herein, the appraised value is based on the whole

ownership and possessory interest undiminished by any liens, fractional interests

or any other form of encumbrance or alienation.90

This certificate is made at the request of the party named for their use. It is

not an indication or certificate of title ownership. The identification of the91

interest of the requesting party is simply that represented to the appraiser by

such party and no inquiry or investigation has been made nor is any opinion given

as to the truth of such representation.92

The value expressed herein is based on the appraiser’s best judgment and opinion93

and is not a representation or warranty that the items will realize that value if

offered for sale at an auction or otherwise. The values expressed are based on

current information on the date stated on the cover page of this report. No94

opinion is hereby expressed as to any future value, nor unless otherwise stated,

as to any past value.95





13

DISCLAIMERS, LIMITING CONDITIONS AND ASSUMPTIONS(Continued from Page 11)

The appraiser is not responsible if items are sold at a reduced value for future

liquidation. Reported appraised values are the fair market values as defined on

Page 9 of this report. Reported appraised values are not the prices that would

be achieved through discounted or wholesale sales.96

The appraiser has considered the highest and best use of the appraised articles

with respect to the most appropriate, common, and legal marketplace given the

purpose of the appraisal.97

The appraiser has no past interest, no present interest, nor any contemplated

future financial interest in the appraised property. Although Mrs. Pull was a98

student of the appraiser, the appraiser has no other personal interest or bias

with respect to the parties involved. This appraisal was done objectively,99

according to the rules of the IRS (in the Pension Protection Act of 2006 H.R. 4,

Public Law 109-280) , and in accordance with the 2008 Uniform Standards of100

Professional Appraisal Practice . Further, the appraiser has no other interest101

which might tend to prevent making a fair and unbiased appraisal.102

This appraisal was researched and prepared by the appraiser named on the cover

page of this report. Primary research was done by APPRAISER NAME at COMPANY103

NAME. Supplemental research was supplied by office assistants at COMPANY NAME,104

particularly Reah Serch. No other person supplied significant assistance in105

preparation of this report.106

The client/donor provided the appraiser with some oral information regarding the

work listed herein. Although the appraiser routinely checked the client’s

information (when possible), the appraiser is not responsible for the accuracy of

this information.107

Information originally provided by the client through documents and/or auction

catalogues is assumed to be correct, however, the appraiser is not responsible for

any errors or misrepresentations on the part of either the client or the

documentation.

The appraiser did not personally examine any of the comparable sales and/or

offerings with regard to these particular works. The appraiser is relying on

information made available through price data bases regarding authenticity,

condition, and sales information concerning these works.108

Consulting sources are listed in the back of the report. Information furnished109

by consulting sources is assumed to be reliable, but is not guaranteed by this

appraiser or her firm.110





14

DISCLAIMERS, LIMITING CONDITIONS AND ASSUMPTIONS(Continue from Page 13)

The appraiser is not required to give testimony, be present in any court of law,

or appear before any commission or board by reason of this appraisal, unless prior

arrangements have been made with the appraiser. Should this report be111

challenged in anyway, not limited to litigation, it is understood that the

appraiser is prepared to defend their appraisal, if required. Courtroom

testimony, mediation proceedings, and the necessary preparation are considered to

be separate assignments and will be billed at our then current normal hourly rate

plus expenses as required.

Possession of this report, or copy thereof, does not include the right of

publication without the written consent of the appraiser and her firm. This

report in its entirety, or any part thereof, including the identity of the

appraiser or her firm, shall not be made public through advertising, public

relations, news releases, sales, or other distributive or information media

without the written consent of the appraiser and her firm.112

Copies of this appraisal and notes pertaining to the appraisal, written and

electronic, will be kept in the offices of COMPANY NAME for a minimal period of

five (5) years after the date of issue or two (2) years after final disposition

of any judicial proceedings involving the appraiser, whichever period expires

last. COMPANY NAME will make every effort to store clients/donors records in113

a safe and secure environment, however the firm is not responsible for acts of

war, terrorism, or other such unexpected catastrophes which may affect the

safekeeping of this report.

All matters treating the duties, responsibilities, and liabilities of the

appraiser are in accord with the Valuation Standards and Professional Practices

as outlined by the Appraisal Foundation in the 2008 Uniform Standards of

Professional Appraisal Practice and the Principles of Practice and the Code of

Ethics of the Appraisers Association of America.114

_______________________________________________________________________________© 2009 COMPANY NAME. All Rights Reserved. None of the contents of this appraisal report may be reproduced, stored in a retrieval systemor transmitted in any form or by any mean (electronic, mechanic, photocopying, recording or otherwise) without the prior written permissionof COMPANY NAME and the appraisers' signature.




15

MARKET ANALYSIS115

Recent published auction sales and available gallery sales are listed in the report

following the description of the appraised articles. These listings serve to

substantiate the final appraised value as well as indicate market preferences and

levels. Copies of these sales as well as a copy of this report are kept on file in the116

offices of COMPANY NAME for a period of five years or two years after any judicial

proceedings in accordance with the standards set forth in the 2008 version of Uniform

Standard of Professional Appraisal Practice (Record Keeping, p. 9).117

Given that the art markets are always volatile markets, an overall market valuation

forecast cannot be established. Particularly with the uncertain political and economic

situation of the world after September 11, 2001, a market analysis is difficult to

prepare in these unstable times.

Many factors enter into valuations of fine art beyond pure aesthetic appeal. Among the

principles which may affect future values of items are the basic economic principles of

supply and demand, national and international legislation, the global monetary market,

social attitudes, and design trends. However, based on an analysis of the market since

2000 and an optimistic presumption of a future relatively stable growth, it could be

concluded that certain areas have and will appreciate at a greater rate than others.

After several disastrous seasons in the early 1990s, values in the works of first and

second tier Contemporary artists have stabilized; with some significantly increasing in

value. As expected, the best pieces have and will always fetch premium prices vs.

mediocre pieces.

Contemporary art is always difficult to value since an artist’s work must stay on the

cutting edge in order to remain contemporary. Additionally, an artist must retain a

gallery presence to sustain his values. In the case of Famous artist, during his

lifetime, he had been successful at keeping his style “fresh” and at maintaining a

gallery presence. His work is respected by museums, critics, and art historians. His

work continues to sell at both a gallery and auction level. His auction prices have

significantly risen in the past five years, catching up to his prices at the gallery

level - a feat many contemporary artist’s fail to accomplish.

The MMMMM suite is an interesting work as it is of interest to a variety of collectors,

yet the appraiser is unable to find it marketed in the appropriate marketplace.

Obviously, it has significance to the art collector, but it is also a desirable piece of

interest to a -------- collector and a historical artifact collector. If appropriately

marketed, this suite would have significant value, particularly given its provenance form

the collection of the former Important Person.

Notes: This appraiser does not guarantee any prices or predictions for values in the

future.

Fair Market Value is referred to as “FMV” throughout this report. FMV includes buyer’s

premium as indicated in the 1992 TAM ruling.




16

TOTAL VALUE118

FAIR MARKET VALUE OF DONATION $000.00

GRAND TOTAL $ 000.00




According to the Bid it Up auction catalogue of Modern and3

Contemporary Works of Art, January 12, 2003, lot 121 (Exhibit 4)

Vincent Van Went, the Assistant Curator of Western Art at the Famous4

University Art Museum, email dated October 1, 2008 (Exhibit 2)

Modern and Contemporary Works of Art, Bid it Up Auction, Anytown,5

Anystate Sale - January 12, 2003 Lot 121 (Exhibit 4)



17

DONATED ITEM NUMBER ONEXXXXXXXX

Article Appraised

Number Value Description

1. $ 000.00 Title : XXXXXXXX119

Piece

Description : An energetic abstract expressionist composition120

showing large bold strokes of color on a dark ground, executed with

thick areas of impasto in yellow, white, blue, and grey on a black

ground

Medium : Magna acrylic on canvas121

Artist : Famous artist (American, 1923 - 1996)122

Date : 1979123

Reported markings : Titled XXXXXXXX, dated 1979, and indicated Magna124

on verso (Exhibit 4)3

Reported canvas size : 257.8 x 720.1 cm (101.5 x 283.5 inches)125 4

(28,775.25 square inches)

Reported canvas size : 259.1 x 721.4 cm (102 x 284.5 inches)126 5

Unframed127

Provenance : Bid it Up Auction, Anytown, Anystate Sale - January128

12, 2003 Lot 121 (Exhibit 4).

Purchase price : Unconfirmed; estimate $30,000-40,000.129

Exhibition : Modern and Contemporary Works of Art, Bid it Up130

Auction, Anytown, Anystate Sale - January 12, 2003 Lot 121 (Exhibit

4).

Condition : Good; no significant condition issues (Exhibit 2)131 6

Images : Photo 1132




http://www.artnet.com/galleries/Exhibitions.asp?gid=369&cid=1309617

18

Famous artist133

(1923 - 1996)

Famous artist was a prolific artist who painted throughout his life time. He was

renowned for his fluid and expressive abstracts. Famous artist was born in Prague in

1925, and immigrated to the US and settled in New York in 1942. His artistic career

flourished in the creative atmosphere of New York City where he began exhibiting at

various galleries. The positive reactions eventually led to successful shows in Los

Angeles and Paris throughout the 1960s.

Famous artist studied art in his native land before fleeing Nazi Germany in 1942. In

Manhattan, during the early 1950s, he shared a studio with fellow abstract painter,

Equally famous artist. He began exhibiting his Abstract Expressionist paintings at this

time. His work was included in the Ninth Street Show in New York City in 1951, and in

group exhibitions at the Leo Castelli Gallery, the Stable Gallery, and the Tibor de Nagy

Gallery, among others. After the Ninth Street Show Annual Invitational, exhibitions of

his work were held at the Stable Gallery throughout the 1950s. The Second New York

Painting and Sculpture Annual at The Stable Gallery in 1953, included an introduction

by Clement Greenberg.

In the 1960s he became associated with Color Field painting and Lyrical Abstraction.

He was included in Post-painterly Abstraction, a 1964 exhibition curated by Clement

Greenberg. Famous artist was a friend of Clement Greenberg, who in turn introduced him

to Jackson Pollock and other pivotal artists of the New York School.

As his reputation grew, galleries from around the world began to take notice. In the

1970s and 1980s, exhibitions of Famous artist paintings were held at influential

galleries throughout the United States, England, France, and Germany.

In the 1970s, Famous artist began expanding in both shape and color in his canvases.

This change signaled not only a revolution within Famous artist’ own work, but it marked

the emergence of Famous artist as a key figure amongst the Color Field painters.

Previously thought to be a second rate Abstract Expressionist in a milieu that included

superstar painters such as Mark Rothko and Helen Frankenthaler, Famous artist now was

a forerunner in color field paintings of the 1970s. In his mural-sized paintings of

this period, Famous artist created a virtual narrative structure, set against earth-

toned grounds that anchor the color fields while simultaneously enabling their motion.

These works are exuberant and luxurious, filled with a wide range of radiant light and

atmosphere.7

As his work increased in size (up to 24 feet wide), his technique became more fluid,

bolder, and expressive. During the last three decades of his career, Famous artist had

more than sixty solo exhibitions around the world. He was represented by the Andre

Emmerich Gallery and Knoedler Contemporary Arts in New York for more than thirty years.

In 1970 he settled with his family in Vermont, but continued to paint and occasionally

stayed in Philadelphia, where his paintings were regularly exhibited.





19

FAM OUS ARTIST

(Continued from Page 17)

Famous artist’s technique required the use of Magna paint, an oil-based acrylic paint.

Magna was originally developed by the paintmakers Leonard Bocour and Sam Golden for

Morris Louis. Famous artist would apply thick layers of color over washes, scrubbing

the paint into the unprimed canvas. He used staining, brushing, and other ways of

applying color. His paintings were generally large in size and scale, but he also made

numerous small paintings as well.

Throughout the decades of the 60s, 70s, and 80s, Famous artist taught and lectured at

several prestigious institutions. They included Dartmouth College, Hanover, New

Hampshire (1964); University of Pennsylvania, Philadelphia (1965-1967); and Cornell

University, Ithaca, New York (1967-1972). He had the longest relationship with the

School of the Museum of Fine Arts, Boston, where he taught from 1972 to 1989.

His work is part of many museum collections which include, the Whitney Museum of

American Art, New York; the Guggenheim Museum, New York; the San Francisco Museum of

Modern Art, California; Yale University Art Gallery, New Haven, Connecticut; the

Smithsonian American Art Museum, Washington, D.C.; Georgia Museum of Art, Athens,

Georgia; Rose Art Museum of Brandeis University, Waltham, Massachusetts; the Kemper

Museum of Contemporary Art, Kansas City, Missouri; Newark Museum, Newark, New Jersey;

Famous University Art Museum, Famous, New Jersey; the Albright-Knox Art Gallery,

Buffalo, New York; the Herbert F. Johnson Museum of Art, Ithaca, New York; the Parrish

Art Museum, Southampton, New York; the Portland Art Museum, Portland, Oregon; the Museum

of Fine Arts, Houston, Texas; the Boston Museum of Fine Arts, Massachusetts; and

Metropolitan Museum of Art, New York.

Famous artist was awarded two Guggenheim Fellowships (1969 and 1972) and he also

received the National Council on the Arts Award (1970).




20

COMPARABLE SALES AND OFFERINGS FOR XXXXXXXXAUCTION SALES / OFFERINGS134

Image goes

here

10/01/08 - Christie’s, NY, lot 19, -----, 1970, a/c, 72 x 72 (5,184

square inches), est. $25,000-35,000; sold $43,000 (inc. premium) ($8.29

per square inch)

Image goes

here

03/01/08 - Christie’s, NY, lot 27, -----, a/c, 1970, 54 x 152 (8,208


per square inch)

Image goes

here

01/12/08 - Sotheby’s, NY, lot 72, -----, 1970, 102 x 248 (25,296 square

inches), est. $50,000-70,000; sold $37,000 (inc. premium) ($1.46 per

square inch)

Image goes

here


square inches), est. $25,000-35,000; est. $25,000-35,000; sold $38,400

(inc. premium) ($5.79 per square inch)

Image goes

here



per square inch)

Image goes

here

11/12/07 - Sotheby’s, NY, lot 36, -----, 1970, a-magna/canvas, 60 x 162.2

(9,732 square inches), est. $25,000-35,000; sold $45,000 (hammer) ($4.62

per square inch)

Image goes

here

10/15/07 - Sotheby’s, NY, lot 72, -----, 1975, magna/canvas, 72 x 72

(5,184 square inches), est. $20,000-30,000; sold $42,000 (inc. premium)

($8.10 per square inch)

Image goes

here


square inches), est. 20,000-30,000; sold $54,000 (inc. premium) ($8.78

per square inch)

Image goes

here



per square inch)

Image goes

here



per square inch)

Image goes

here

09/15/06 - Christie’s, NY, lot 24, -----, 1965, o/c, 57 x 89 (5,073


per square inch)

Image goes

here

05/12/05 - Christie’s, NY, lot 18, -----, 1975, 96 x 96 (9,216 square

inches), work on canvas, est. $15,000-20,000; sold $57,360 (inc. premium)

($6.21 per square inch)




21

COMPARABLE SALES AND OFFERINGS FOR XXXXXXXXGALLERY SALES / OFFERINGS135

The following large Famous artist works were available at the Famous Art Gallery, New

York on September 25, 2008

Image goes here -----, 1970

Magna acrylic on canvas

78½ x 195 inches (15307.5 square inches)

Asking $140,000 ($9.14 per square inch)



43 x 166 inches (7138 square inches)



Acrylic on canvas

95 x 256 inches (24,320 square inches)




74 x 197 inches (14578 square inches)





This calculates at $4.17 per square inch - less than any of the8

comparables)

22

VALUATION FOR XXXXXXXX136

The average square inch price for the thirteen (13) large comparables that

sold at auction in recent years was $6.70 per square inch. Applying this

figure to XXXXXXXX (28,775.25 square inches) sets the value of XXXXXXXX at

$000 (28,775.25 x $0 = $000). However, the larger works are more

difficult to sell as their market is limited by the requisite wall space.

The auction market is not necessarily the appropriate market for the

extremely large Famous artist’ works because they tend to be site specific

works. Work of this size were usually commissioned works. Since the

artist died in 1996, it is impossible to ascertain his fees for

commissioned works in the 2008 gallery market.

However, the gallery market may be a better, more appropriate marketplace

as there readily available larger works. Works available from the Famous

Artist Gallery range from $000-000 (see Page --). The average price per

square inch for these paintings is $00. Applying this figure to XXXXXXXX

(28,775.25 square inches) sets the value of XXXXXXXX at $000 (28,775.25 x

$00 = $000).

Using the average auction and gallery square inch price ($0+ $0 ÷ 2 = $0)

would set the value of this work at $0 (28,775.25 square inches x $0 =

$0). However, since the larger works are more difficult to sell as their

market is limited by the requisite wall space, a discount of 50% is

applied to this figure to establish the 2008 FMV at $0, rounded to $000

($0 - 50% = $0, rounded to $000 ).8




The artist may have been Artist #7. Artist #7's work may have been9

censured because of a future incident. Details not included in this sample

report.

Quote from one of artists. . Details not included in this sample10

report.

Artist #6 comment11

23

DONATED ITEM NUMBER TWOMMMMM

Article Appraised

Number Value Description

2. $ 000.00 Title : MMMMM (Cat. Rais. #)137

Piece

Description : A suite of three (3) colored prints (one printed on138

both sides) comprised of various artists’ interpretations of imagery

-----. On each sheet are three (3) or four (4) black blank fields

where additional ---------could have been placed . Additional9

images include simply printed ------------------ by Artist #1, --

with three (3) figures by Artist #2, --------- with US images on

transfer photos by Artist #3, ----- featuring the World Trade

Center, Artist #4 -------- images, and ----- image by Artist # 5

Medium : Photo offset lithographs printed in two (2) colors on139

watermarked Arches paper.

Artists : Artist #1 (American, 1918 - 1988), Artist #2 (American,140

born 1945), Artist #3 (American, 1915 - 1995), Artist #4 (American,

1928 - 1998), Artist #5 (American, born 1939)

Publisher : -------------, Inc., New York141

Printer : -----, Brooklyn, New York (assisted by Tom142

Gormley)10

Date : 1972143

Reported markings : One (1) single and one (1) double-sided print144

are numbered and dated at lower right, pencil-signed by each artist

(except Artist #1 whose signature is blind-stamped) in the block

provided for signatures; one (1) single-sided print is numbered and

dated at lower left, pencil-signed by each artist (except Artist #1

whose signature is blindstamped) in the block provided for

signatures11

(Continued)




Cat. Rais. quote12



Knestrick, Walter G. Red Grooms: The Graphic Work. New York: Harry14

N. Abrams, 2001, page 302.



24

(Continued)

Edition number : 65/85 (from the total edition of 85 plus 10145

artist’s proofs)Reported work size : 68.6 x 55.9 cm (27 x 22146

inches)12

Reported work size : 70.5 x 56.0 cm (27 3/4 x 22 1/16 inches)147 13

Reported image size : 61.6 x 50.2 cm (24½ x 19 3/4 inches)148 14

Unframed149

Provenance : Unknown150

Condition : Good; no significant condition issues (Exhibit 2)151 15

Images : Photos 2-3152




Although both retail sales are from Fall 2008, 9-10 months after the16

date of donation, the appraiser does not feel that the market has changed and

the galleries would have the same asking prices in January 2008 as in Fall

2008.

Based on the conversion rate as of October 2, 2008 (date of research),17

1£ = $1.992 (per http: //www.oanda.com/convert/fxhistory).

25

COMPARABLE SALES AND OFFERINGS FOR MMMMM153

AUCTION SALES / OFFERINGS

01/17/2008 - Stockholms Auktionsverk, Stockholm, lot 12, MMMMM, one sheet,

est. $1,967; unsold

12/26/2006 - Phillips, NY, lot 22, MMMMM, one sheet, est. $1,500-2,000; sold

$1,500 (hammer)

04/27/2005 - Weschler’s, Washington, D.C., lot 33, MMMMM, one sheet, est.

$1,000-1,500; sold $1,495 (inc. premium)

RETAIL SALES / OFFERINGS16

October 2008 - Small Gallery, London, MMMMM, one sheet; asking £3,000

($5,976)17

September 2008 - Not-so-Famous Gallery, Washington, D.C., MMMMM, each sheet;

asking $3,500 ($10,500 for three)




26

VALUATION OF MMMMM154

Many factors enter into the rarity of this suite. Some of these factors are

not generally known/considered to the public, thus finding the appropriate

market difficult to locate.

Aside from the obvious that these signed collaborative works were done by

major artists demonstrating their current styles, there is an historical

importance to the type of paper and size of images. Never before had the

------ permitted use of their paper to be used for artwork. This gives the

work historical significance that may attract not just an art collector, but

also, a ----- collector, or a history buff.

Also important to these works are Artist #4's choice of images - the World

Trade Center. Since September 11 , images of the World Trade Center haveth

increased in value. Again, this work would attract the art collector as

well as the history/photography collector.

Additionally, these prints record the events of the famous, but short-lived

publisher, a phenomenon important to the history of 20 century art. Theth

importance of this material is substantiated in the fact that the MOMA

currently holds the famous publisher’s archives.

Lastly, given the ----- nature of this work, the provenance is particularly

meaningful. Knowing that this work is from the collection of the former

Famous Person adds to its value.

As such, it is unlikely that the listed comparables are true indicators of

the value of these works. First, the only full set was at a not-so-famous

gallery in Washington D.C. When the appraiser called the gallery to discuss

these prints, the salesperson was unfamiliar with any of the history or

significance of the works. Ironically, the only person who recognized the

rarity and importance of these works was outside of the US at the small

gallery in London.

As such, given the unusual nature of the suite, with consideration to the

absence of market recognition, the appraiser is using the gallery in London

as the best comparable at $5,976 each. However, recognizing that some value

is lost due to the weakness of the American dollar, the values are based on

$5,000 each, establishing the 2008 FMV for the three (3) works in MMMMM, to

be $15,000.




27

SOURCES155

THE FOLLOW ING REFERENCE BOOKS AND PRICE GUIDES W ERE CONSULTED:

_____. Annual Guide to Galleries, Museums, Artists. New York: Art in America,

1998 - 2008.

_____. Uniform Standards of Professional Appraisal Practice and Advisory

Opinions. 2008-2009 Edition. Washington, D.C.: Appraisal Standards Board,

2007.

Cattell, Jaques, ed. Who's Who in American Art. New York: R.R. Bowker, 1973 -

2004.

Named Catalogue Raisonné. New York: Harry N. Abrams, 2002.

THE FOLLOW ING GALLERIES, EXPERTS, AND AUCTION HOUSES

WERE SPECIFICALLY CONSULTED:

Christie’s, New York

New York Fine Art, New York

Not-so-Famous Gallery, Washington, D.C.

Museum of Modern Art, New York

Small Gallery, London

Famous Art Gallery, New York

Another Gallery, New York

Phillips, New York

Bid it Up, Anytown

Sotheby’s, New York

Stockholms Auktionsverk, Stockholm

Weschler’s, Washington, D.C.

THE FOLLOW ING INTERNET SITES WERE SPECIFICALLY CONSULTED:

www.artfact.com

www.artmuseum.Famous.edu

www.artnet.com

www.artprice.com

www.askart.com

www.gordonsart.com

www.oac.cdlib.org

http://www.artnet.com


http://www.artfact.com

http://www.artmuseum.princeton.edu


http://www.artprice.com

http://www.art-sale-index.com

http://www.askart.com

http://www.fahlstrom.com

http://www.gordonsart.com

http://www.oac.cdlib.org




28

1.AAA Elements of a Correctly Prepared Appraisal, #2; AAA #17; IRS Pub. 561

2.USPAP 8-2(a)(i); AAA #1; AAA #17

3.IRS Publication 561

4.AAA #17

5.USPAP 8-2; AAA #6

6.AAA #17

7.AAA #17

8.AAA #17

9.USPAP 8-3; AAA #3

10.Pub. 561; AAA #13

11.Pub. 561; AAA #13

12. USPAP Ethics

13.USPAP 8-3

14.USPAP 8-3; Pub. 561

15.USPAP 8-3; AAA #3

16.AAA #3


18. AAA #9

19.AAA #3

20.USPAP 8-3; Pub. 561; AAA #3

21.USPAP 8-3; Pub. 561

22.USPAP Ethics: Management

23.USPAP Ethics: Management; Pub. 561

24.USPAP 8-3

http://www.giotto.org




29

25.USPAP Ethics: Conduct; 8-2(a)(ii); USPAP 8-3; Pub. 561; AAA #5

26.Pension Protection Act; IRS Section 6695A

27.Pub. 561

28.Pub. 561

29.USPAP 8-3

30.USPAP 8-3; AAA #3; Pub. 561; PPA

31.USPAP 7-2 (d); USPAP Statement 3



34.USPAP 8-2(a)(x); AAA

35.AAA #17

36.USPAP 8-2(a)(ii)

37. AAA #10

38.Pub. 561; AAA #10

39.USPAP 8-2(a)(vi); Pub. 561; AAA #10

40.USPAP 8-2(a)(vi); AAA #10

41.USPAP 8-2(a)(ii); AAA #3; Pub. 561

42.USPAP 8-2(a)(ii); Pub. 561; PPA

43.USPAP 8-2(a)(ii); AAA #13; Pub. 561

44.USPAP 8-2(a)(ii); AAA #10; Pub. 561; PPA

45.AAA IV

46.USPAP Scope of Work Rule; AAA #4

47.USPAP Scope of Work Rule; AAA #4

48.USPAP Scope of Work Rule; 8-2(a)(I); 8-2(a)(ix); AAA #4; Pub. 561




30

49.USPAP Scope of Work Rule; 8-2(a)(I); AAA #4; Pub 461

50.USPAP Scope of Work Rule; 7-2(e)(iv); 8-2(a)(iv); AAA #4; Pub 461

51.USPAP Scope of Work Rule; 8-2(a)(ii); AAA #4; Pub 461

52.USPAP Scope of Work Rule; 8-2(a)(I); AAA #4; Pub 461

53.USPAP Scope of Work Rule; Pub 461

54.USPAP Scope of Work Rule; 8-2(a)(vi); AAA #4; Pub 461

55.USPAP Scope of Work Rule; 7-2(e)(iv); 8-2(a)(iv); AAA #4; Pub 461

56.USPAP Scope of Work Rule; 7-2(e)(iii); AAA #4; AAA #12; Pub. 561

57.USPAP Scope of Work Rule; 8-2(a)(x); AAA #4; AAA #12



60.USPAP Scope of Work Rule; 7-2(e)(iii); AAA #4; AAA #12

61.USPAP Scope of Work Rule; 7-2(c)(iv); AAA #4; AAA #12

62.USPAP Scope of Work Rule; 7-2(e)(iii); 8-2(a)(v); AAA #4; AAA #12


64.USPAP Scope of Work Rule; AAA #11; Pub. 561


66.USPAP Scope of Work Rule; 8-2(a)(viii); AAA #4; AAA #12

67.USPAP Scope of Work Rule; AAA #11; Pub. 561

68.USPAP Scope of Work Rule; 7-2(e)(I); AAA #4; IV; Pub. 561

69.USPAP Scope of Work Rule; 7-2(e)(ii) & (iii); AAA #4; Pub. 561

70.USPAP Scope of Work Rule; 8-2; AAA #4

71.USPAP Ethics: Confidentiality; Scope of Work Rule; AAA #4; Pub. 561; GrammLeach Bliley Act

72.USPAP Scope of Work Rule; 8-2(a)(v); AAA #4; Pub. 561




31

73.USPAP Scope of Work Rule; 8-2(a)(ix); AAA #4; Pub. 561

74.USPAP Scope of Work Rule; 8-2(a)(v); AAA #4; Pub. 561

75.USPAP Scope of Work Rule; 8-2(a)(v); AAA #4

76.USPAP Scope of Work Rule; 7; 8; 8-3; AAA #4; Pub 861

77.USPAP Scope of Work Rule; AAA #4; IV

78.USPAP Preamble; AAA #12; IV

79.USPAP Preamble; Scope of Work; AAA #12

80.USPAP Preamble; 8-2(a)(ii); AAA #12; Pub. 561

81.USPAP 8-2(a)(viii); AAA #7; Pub 861

82.USPAP Preamble; 8-2(a)(v); AAA #12; Pub. 561

83.USPAP Preamble; 8-2(a)(I); AAA #12; Pub. 561


85.USPAP Preamble; 8-2(a)(ii); AAA #12; Pub. 561



88.USPAP Preamble; 8-2(a)(ii); AAA #12

89.AAA #12; Pub. 561

90.USPAP Preamble; AAA #12; 7-2(e)(iii); 8-2(a)(v)

91.USPAP Preamble; AAA #12; 7-2(e)(iii); 8-2(a)(v)

92.USPAP Preamble; AAA #12

93.USPAP 8-3; AAA #12; Pub. 561

94.USPAP Preamble; 8-2(a)(vi); AAA #12

95.USPAP Preamble; 8-2(a)(v); AAA #12

96.USPAP Preamble; 8-2(a)(viii); AAA #12




32

97.USPAP Preamble; 8-2(a)(ix); AAA #12

98.USPAP Ethics; 8-3; AAA #12; Pub. 561

99.USPAP 8-3; AAA #12; Pub. 561

100.USPAP Ethics; Scope of Work Rule; 8-2(a)(x); AAA #12

101.USPAP Scope 8-3; AAA #12; PPA

102.USPAP Ethics; AAA #12; Pub. 561

103.USPAP 8-3; AAA #12; Pub. 561

104.USPAP 8-3; AAA #12; Pub. 561

105.USPAP 8-2(a)(vii); 8-3; AAA #12; Pub. 561

106.USPAP 8-3; AAA #12; Pub. 561



109.USPAP 7; 8-2(a)(vii); AAA #12




113.USPAP Preamble; Ethics: Record keeping; AAA #12

114.USPAP Preamble; 8-3; AAA #12

115.USPAP Scope of Work Rule; 8-2(a)(viii); AAA #12; Pub. 561

116.USPAP Scope of Work Rule; 8-2(a)(viii); AAA #12; Pub. 561

117.USPAP Ethics: Record keeping; AAA #12

118.USPAP Preamble; AAA #12; Pub. 561

119.USPAP 8-2 (a)(iii); AAA #11; Pub. 561





33














134.USPAP 8-2 (a)(viii); AAA #16; Pub. 561














34











155.AAA IV

SAMPLE REPORT

USPAP DOES NOT DICTATE FORM, FORMAT OR STYLE

APPRAISER’S LETTERHEAD

CONTACT INFO

Dr. Diane Pill and Mr. Justin Case2008 “RETAIL REPLACEMENT VALUE” INSURANCE SUMMARY APPRAISAL REPORT PAGE 1 OF 34

1

APPRAISERS’ CERTIFICATION

APPRAISAL COMPANY NAME is a registered firm of appraisers qualified to appraise

residential contents, fine art, antiques, and jewelry. APPRAISER’S NAME, AAA,

(Fine Art Appraiser) examined and photographed all articles. She closely

examined and appraised the articles of fine art, silver, and china. ---- -. ----

- (Decorative Art Appraiser) examined and appraised all articles of furniture and

rugs. -------- ------, ---. assisted in the examination and the appraisal of the

Fine and Decorative art. ---- -----, GG examined and appraised all items of

jewelry.

Valuation is based solely on personal research and analysis of comparative market

data as performed by the appraisers and office assistants at APPRAISAL COMPANY

NAME. No other party was significant in the valuation of the appraised property.

Although the statements of fact contained in this report are true and correct,

the reported analyses, opinions, and conclusions are limited only by the reported

assumptions, extraordinary assumptions, limiting conditions, and hypothetical

conditions. The values expressed herein are based on the appraisers’ best

judgement and opinion and are not representations or warranties that the items

will realize that value if offered for sale in an appropriate market within the

United States.

The appraisers, without any past, present, or contemplated future interest or

bias which might tend to prevent a fair and objective appraisal declare the

current retail replacement value of each item.

Compensation for this appraisal is not contingent upon the arrived valuation.

Fee is based on an hourly rate plus expenses. No person, group, or organization

was given a fee in connection with the procurement of this appraisal assignment.

Further, compensation is not contingent upon the reporting of a predetermined

value or direction in value that favors the cause of the client, the amount of

the value estimate, the attainment of a stipulated result, or the occurrence of

a subsequent event.

The objective of this report is to provide an unbiased retail replacement value

guideline and a basis for insurance portfolio evaluation.

Photographs, when included, are for reference in the event of a claim under an

insurance policy.

This is a partial contents appraisal. Appraisers only appraised articles of Fine

and Decorative Art and Jewelry as designated by the client.

This report has been written according to the rules of the 2008-2009 USPAP

(Uniform Standard of Professional Appraisal Practice). This appraisal is

considered to be a “current” summary appraisal report.


SAMPLE REPORT



CONTACT INFO


2


Although these certification pages include salient information regarding the

methodology of the report, additional information regarding the scope of work,

assignment conditions, and disclaimers are important to understand the entire

appraisal process. As such, the entire report is required to fully understand

the assignment and this certification page encompasses the entire report and is

not valid without reading and understanding the entire report.

Total pages of report:

Total number of articles appraised:

Total number of photographs:

Examination dates: March 28 and June 1, 2008

Research dates: March 29 - August 1, 2008

Effective valuation date: June 1, 2008

Issue date of the report: August 1, 2008

APPRAISER’S NAME, AAA ---- -. -----

Appraisers Association of America, Appraisers A s s o c i a t ion of

America,

Certified Member (Fine Art, silver, porcelain) Member (Decorative Art)

---- ----- GG (Jewelry)

Graduate Gemmologist

SAMPLE REPORT



CONTACT INFO


3

CV’s for each appraiser who signs the report

SAMPLE REPORT



CONTACT INFO


4

TABLE OF CONTENTS

Appraisers’ Certification Page 1

Appraisers’ Qualifications Pages 2a - 2c

FIRST APPRAISER’S NAME, AAA Page 2

SECOND APPRAISER’S NAME Page 2a

THIRD APPRAISER’S NAME Page 2c

Table of Contents Page #

Scope of Work: Appraisal Method and Definition of Value Pages # - #

Explanation of Authorship and Attribution Page #

Disclaimers, Limiting Conditions and Assumptions Pages # - ##

Market Analysis Page ##

Total Value Page ##

Schedule of Fine Art

Article 1 - # Pages ## - ##

Sources Pages ## - ##

References Books and Price Guides Page ##

Galleries, Experts, Auctions, Retail Stores Page ##

Internet Sites Page ##

SAMPLE REPORT



CONTACT INFO


5

SCOPE OF WORK: APPRAISAL METHOD AND DEFINITION OF VALUE

PROBLEM TO SOLVE: The appraisers were asked to provide a current retail

replacement value for a collection of fine and decorative art for insurance

purposes. With the client’s approval/permission, this appraisal report will be

sent to his designated insurance company. This report is not valid for any other

purpose.

CATEGORY OF ITEM S EXAM INED: Late 19 and 20 century art, craftsman and antiqueth th

furniture, rugs, silver, china, and art glass.

CLIENT: Owner of the artwork, Dr. Diane Pill and Mr. Justin Case.

OW NER OF THE ARTW ORK: The client, Dr. Diane Pill and Mr. Justin Case.

OW NERSHIP INTEREST / ART LOSS REGISTER: The question of title was not an issue.

Client provided the appraisers with detailed invoices for major works. The

client did not feel it necessary to perform Art Loss Register inquiries for the

other works.

AUTHENTICITY: Although the appraisers are not authenticators, the appraisers had

no reason to doubt the authenticity of the works, except as noted and appraised

accordingly.

EFFECTIVE DATE OF APPRAISAL: Values expressed in this appraisal are effective on the

most recent examination date, June 1, 2008.

USE OF APPRAISAL: Insurance.

USER(S) OF APPRAISAL: This appraisal can be used and relied upon by the client and

a designated insurance company / agent / broker / underwriter / adjustor. Any

other user is considered an unintended user.

GENERAL ASSIGNM ENT CONDITIONS: The appraisers were allowed adequate time to examine,

photograph, and research the articles listed herein.

Appraisers were given significant documentation for some articles and no

documentation for other articles.

SPECIFIC ASSIGNM ENT CONDITIONS (ASSUM PTIONS): The appraisers assume the mediums to be

as represented. Specific mediums were not tested as they are not pertinent to

the appraised value of these works.

SPECIFIC ASSIGNM ENT CONDITIONS (EXTRAORDINARY ASSUM PTIONS): Appraisers were provided with

some primary documentation for these works. The appraisers assume this

information is accurate and correct.

The appraisers assume the verbal information provided by the client to be

correct.

Information concerning provenance or sales history on certain articles was not

made available to the appraisers. Provenance may play a significant role in

valuation and is not considered in this report.


SAMPLE REPORT



CONTACT INFO


6


The appraisers assume the works described and pictured herein are the pieces

which are the subject of this appraisal and covered under the client’s insurance

policy. The appraisers assume that these articles are not now nor will ever be

substituted with other articles by the client in the event of a loss.

The appraisers assume authorship to be authentic, including signatures to be by

the named artists.

Natural gemstones are processed from the time they are extracted from the earth

by one or more traditionally accepted methods. Therefore, unless otherwise

stated, all colored stones are presumed to have been subjected to a stable and

possibly undetectable color/clarity enhancement process. Value conclusions are

based on these universally practiced and accepted processes.

All pearls are assumed to be cultured or “farmed”, unless accompanied by

documentation supporting a natural origin.

Marks on objects (trademarks, signatures, maker’s marks, serial numbers) may

affect the value of a piece. For the purpose of this appraisal, the appraisers

assume that all markings are authentic, unless otherwise indicated (This is also

considered a Limiting Condition).

The appraisers are not authenticators. As such, in certain cases the appraisers

may recommend authentication a specific marks, age, or authorship.

Authentication of this nature is not the responsibility of the appraisers (This

is also considered a Limiting Condition).

The appraisers assume the client retains full title to works.

The appraisers assume these works were previously traded in an appropriate market

without any unusual market stimuli affecting its sale or transaction.

SPECIFIC ASSIGNM ENT CONDITIONS (LIM ITING CONDITIO NS): This report is limited to the

information provided by the client (This is also considered an Extraordinary

Assumption).

The appraisers did not remove all works from the wall due to their size or

location. The appraisal is limited by what appears on the recto (This is also

considered an Extraordinary Assumption). Works not examined on verso will be

identified as such in the individual descriptions.

The appraisers did not remove any paintings or prints from their mattes and/or

frames to check for signature, markings, and condition. The appraisal is limited

by what appears within the mattes and/or frames (This is also considered an

Extraordinary Assumption).

Only when physically possible and not evasive did the appraisers examine under

the upholstery for signature, markings, and conditions (when applicable). The

appraisal is limited by what appears on the surface (This is also considered an



SAMPLE REPORT



CONTACT INFO


7


Only when physically possible, did the appraisers examine undersides and back

rails of furniture for signatures and condition (when applicable) (This is also

considered an Extraordinary Assumption).

Only when physically possible, did the appraisers remove drawers to examine for

signatures (when applicable) (This is also considered an Extraordinary

Assumption).

Only when physically possible, did the appraisers move heavy furniture to

thoroughly examine for signatures and condition (when applicable) (This is also


Only when physically possible, did the appraisers lift stone slabs atop furniture

to examine for signatures and condition (when applicable) (This is also


The appraisers did not examine or test the workings of clocks for accuracy and

precision (when applicable) (This is also considered an Extraordinary

Assumption).

Chandeliers and sconces were not removed from the ceiling/wall to examine for

signatures or markings (This is also considered an Extraordinary Assumption).

The appraisers did not examine each globe/crystal on chandeliers/sconces/lighting

fixtures for signature or condition (This is also considered an Extraordinary

Assumption).

The appraisers did not examine each works under mounts or protective bases if not

readily removable for signature or condition (This is also considered an


The appraisers did not examine or test electrical works for safety and / or

condition of the wiring (This is also considered an Extraordinary Assumption).

The appraisers did not test any metals for the silver/gold content. The

appraisers relied on the validity/authenticity of the silver/gold markings (This

is also considered an Extraordinary Assumption).

The appraisers did not remove any stones from their mounts. The weight, grade,

color, and clarity may be limited by the “in mount” examination. As such, this

appraisal is limited by what appears within the mount (This is also considered

an Extraordinary Assumption).

The appraisers may be unable to ascertain the origin of pearls due to limitations

of portable equipment. As such, in some cases, expert analysis and X-ray

procedures may be recommended, Determination of pearl origin is not the

responsibility of the appraisers (This is also considered an Extraordinary

Assumption).


SAMPLE REPORT



CONTACT INFO


8


When examining diamonds and colored stones, every reasonable effort has been made

to determine the existence of a fracture filling, clarity, or color enhancement

process. However, no binding representation can be made in all circumstances as

to the existence or nonexistence of such process. Enhancement procedures are

often undetectable through the use of a standard portable laboratory. Detection

of enhancements is limited by the gemological equipment used (This is also


The appraisers are not conservators or jewelry repair technicians. As such, they

did not prepare a condition report. This report is limited by the appraisers’

visual inspection. No other condition report was supplied (This is also


When examining diamonds and colored stones, every reasonable effort has been made

to determine the existence of a fracture filling, clarity, or color enhancement

process. However, no binding representation can be made in all circumstances as

to the existence or nonexistence of such process. Enhancement procedures are

often undetectable through the use of a standard portable laboratory. Detection

of enhancements is limited by the gemological equipment used (This is also


The appraisers are not conservators or jewelry repair technicians. As such, they

did not prepare a condition report. This report is limited by the appraisers’

visual inspection. No other condition report was supplied (This is also


SPECIFIC ASSIGNM ENT CONDITIONS (HYPOTHETICAL CONDITIONS): No Hypothetical Conditions

exist.

EXAM INATION AND M ETHOD OF EXAM INATION OF FINE AND DECORATIVE ART: The appraisers examined

the works in the client’s home in Greenwich, Connecticut, under daylight,

incandescent light, and/or a halogen flashlight. An ultra-violet light was not

used as the environment was not properly conducive for such examination.

When appropriate, the appraisers examined certain objects with a 5/7/20X

magnification optical quality loupe.

The appraisers were able to ascertain medium, style, and quality of works from

personal examination, referencing photographs, supporting documentation, and

personal research.

The appraisers measured most works. Measurements are given to the nearest 1/8

inch; height precedes width unless otherwise stated. On certain large works, the

appraisers accepted the information from the receipts, if available. Works not

measured by the appraisers will be identified as such in the individual

descriptions.

No condition report was supplied. The appraisers assigned each piece a general

condition comment - good, fair, or poor - and a qualification when appropriate.

“Condition” refers to what is considered generally acceptable, with ordinary wear

and tear for its type, unless otherwise noted.


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M ETHOD OF EXAM INATION OF JEW ELRY: APPRAISER’S NAME, AAA, briefly examined the items

in the client’s home in Greenwich, Connecticut, under daylight while

photographing the collection.

The gemmologist, ---- -----, more thoroughly examined and evaluated the items in

this appraisal by using the accepted standards of the jewelry industry and those

of the Gemmological Institute of America. Data was collected “on site” and in

accordance with those standards by using careful observation and professional

equipment. Items were examined through one or more of the following

devices/equipment: a portable Gemmological laboratory, an American Optical 570

Binocular Microscope with 10x-63x magnification, 10x loupe, a fiberoptic probe

illuminator (with monochromatic filter), long and short wave ultraviolet (UV)

fluorescence, Rayner Refractometer, dichroscope, spectroscope, electronic scales,

leveridge gauge, G.I.A. Gem Set, Gem Dialogue Color Comparison, Diamond Grading

Light Source, G.I.A. diamond master comparison stones, and a metal testing kit.

The quality grade of any gemstone is restricted by various types of mountings,

settings, and lighting conditions. This quality grade of any gem may differ if

it is removed from a mounting and/or examined under a different light source.

However, in order to standardize the examination environment, the jewelry

industry has prescribed the use of “special” lighting. The prescribed light

sources were used in this examination. This includes both a diamondlite (north

daylight equivalent) and a fiber optic probe (monochromatic light source).

Additionally, when appropriate, long/short wave (UV) fluorescence was used to aid

in the authentication of diamonds and colored stones.

Metal quality of finished jewelry cannot be conclusively established by the

gemologist appraiser. Common industry practice suggests that metals be

identified by acid testing, test needles and rub stones as well as confirming the

authenticity of identification marks. The designer and/or manufacturer of a

given piece of jewelry may be identified by extensive research and the

authentication of trademarks, hallmarks, and maker’s marks.

The gemologist appraiser was able to ascertain material, style, size, and quality

of workmanship from his personal examination, referencing photographs, and

personal research.

Each work has been measured. All measurements are approximate. Measurements are

given to the nearest mm/gram. Unless otherwise stated, the weights of all

mounted gemstones are estimated by using accepted gemological formulas, and

should be within the accepted limitations of that method. Although state-of-the-

art gemological equipment is used, the actual weight of gemstones when unmounted

may be different from the estimated wight by formula (This is also considered an

Extraordinary Assumptions and Limiting Condition).

No jewelry condition report was supplied. The gemmologist appraiser assigned

each piece a general condition comment - good, fair, or poor - and a

qualification when appropriate. “Condition” refers to what is considered

generally acceptable, with ordinary wear and tear for its type, unless otherwise

noted.


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PHOTOGRAPHY: APPRAISER’S NAME, AAA took 35mm photographs of the works. No

modifications or alterations were made to the appraisers’ photographs.

M ETHOD OF RESEARCH: Research was conducted in the offices of COMPANY NAME. The

office is equipped with an extensive library of more than 10,000 research books

and auction catalogues. Additional research was conducted on the internet using

standard search engines as well as pricing data bases to which COMPANY NAME

subscribes (including ArtNet, ArtFact, ArtPrice, Prices for Antiques, AskArt,

Gordonsart, Invaluable, and Antiqueclockspriceguide). Appropriate galleries and

auction houses were contacted for information when necessary. Minimal outside

library/museum research was conducted for this specific appraisal. Specific

sources and internet sites are listed at the end of the report.

TYPE OF APPRAISAL: This report is considered to be a “current” summary appraisal

report according to the rules of 2008-2009 USPAP (Uniform Standard of

Professional Appraisal Practice).

Comparable sales history is not included in the report. However comparable sale

information is kept in the client’s file in the offices of COMPANY NAME and is

available for the client or the insurance company (with the client’s permission)

to examine upon request.

This information will be kept by COMPANY NAME for a minimal period of five (5)

years after the date of issue or two (2) years after final disposition of any

judicial proceedings involving the appraisers, whichever period expires last.

APPROACH TO VALUE: The appraisers named on the cover page of this document has

employed the "market comparison" approach to arrive at the appraised "retail

replacement value". The "income" approach and the "cost" approach are not

applicable to this particular appraisal.

M ARKET EXAM INED: The "market comparison" approach analyzes recent sales of

comparable articles at major international and regional fine art auctions,

private and public sales, shows and exhibitions, as well as prevailing prices at

retail shops and galleries where the article may normally be traded. For this

particular appraisal, the appraisers primarily examined the international fine

art gallery and auction markets. Adjustments are then made for each article

which consider age, condition, rarity, artistic merit, technical workmanship,

current trends and availability of an article as compared to such recent sales.

TYPE OF VALUE USED: Retail replacement value.

DEFINITION OF VALUE: Appraised "retail replacement value" is defined as the highest

amount in terms of US dollars that would be required to replace a property with

another of similar age, quality, origin, appearance, provenance, and condition

within a reasonable length of time in an appropriate and relevant market. When

applicable, sales and/or import tax, commissions and/or premiums are included in

this amount.


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SOURCE FO R DEFINITION OF RETAIL REPLACEM ENT VALUE: New York University Appraisal

Studies Program, Fall 2006.

USPAP COM PLIANCY: The report was written by APPRAISER’S NAME, AAA whose USPAP

qualification with the AAA is valid until 2009.

This appraisal report follows the guidelines of USPAP in that the report provides

all of the necessary information/analysis to satisfy the “current” report

development requirements as defined in Standard 7 (Personal Property,

Development) and the writing requirements of a Summary Appraisal as defined in

Standard 8 (Personal Property, Reporting).

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EXPLANATION OF SILVER, GOLD, SILVERFINE ART BREAKABLE (SFAB), AND SILVER FLATWARE

Silver - Only articles marked with a sterling standard (925/1000 or greater), the word

sterling, or have been scientifically proven to be sterling, will be described as

sterling silver. Articles with some other silver standard (Continental - 800/1000 or

greater, coin, seven metal), or have proven to be silver of a certain standard, will be

identified accordingly.

Gold - Only articles marked 10K, 14K, 18K, 24K, or have been scientifically proven to be

gold, will be described and identified accordingly as gold.

All weights have been determined by use of Troy or pennyweight scales.

Current spot silver and gold prices on the New York market are a factor in the

determination of appraised value of contemporary silver. Adjustments are then made for

each article after considering age, condition, rarity, artistic merit, technical

workmanship, current trends, and availability of an article.

Gold items with a fine art, antique, or rare value are indicated in the report as

"(GOLD)". This indication is directly under the article number.

(SFAB) - Silver or gold items with breakable parts are known as Silver Fine Art

Breakables and are indicated in the report as "(SFAB)". This indication is directly

under the article number.

Antique silver - Items of antique silver, silverplate, and gold are included in the

Schedule of Fine Art rather than in a Schedule of Contemporary Silver, Silverplate, and

Gold. Antique silver, silverplate, and gold items include such items of rare and

handmade nature. These items are not usually readily available on the primary market.

Flatware qualifications - Values used in flatware appraisals are based on rarity of

pattern and collectibility of the item. Certain patterns increase in value after they

have been discontinued because of their rarity, however others may decrease, depending

on current styles and tastes. Certain articles have become obsolete in the 21 centuryst

(i.e., sardine forks, ice cream forks), however, are highly collectible due to their

limited production and “quirky functions. As such, these pieces have a great collectable

value over standard pieces. The following explains the availability of manufactured

silver:

Active pattern: Active pattern readily available and easily obtainable on the retail

market.

Inactive/discontinued pattern: Pattern not currently in production, however can be

produced with a special order.

Obsolete pattern: Pattern which is no longer available from the manufacturer, the dies

have been destroyed, or the manufacturer no longer in business.

Closed pattern: Limited edition pattern and is no longer available.

Unknown pattern: Appraisers unable to ascertain availability of pattern; owner of dies

unknown.

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EXPLANATION OF FINE JEWELRYDEFINITION OF TERMS

DIAMONDS AND COLORED STONESAll articles of fine jewelry with major stones are examined by a Graduate Gemmologist and

will be described and identified accordingly. Articles of vintage and/or collectible

jewelry are examined by an antiques appraiser and valued as antiques rather than their

value in materials. Diamond and colored stones are valued based on the following

criteria when significant:

CARATCarat is the measure of weight, not the size of the stone. It is a small unit of

measure equal to 200 milligrams. The word "carat" is derived from “carob”, the tree

whose seeds became the standard for measuring diamonds. A 1 carat diamond is made up

of 100 units called "points". Therefore, a 50 point diamond is a ½ carat or .50 carat.

(“Carat” in reference to the weight of a stone should not be confused with "karat" in

reference to gold.)

COLORDiamonds are assigned a color grade based upon the amount of body color exhibited when

compared to a set of Master Color Diamonds which have been color-graded and registered

by the GIA Gem Trade Laboratory. In most cases, diamonds are graded using a

standardized light source equivalent to daylight.

The color grading scale is as follows:

D E F * G H I J * K L M * N O P Q R * S T U V X Y Z *Z+ COLORLESS NEAR FAINT VERY LIGHT YELLOW LIGHT YELLOW FANCY COLORLESS YELLOW YELLOW

CLARITYClarity is an indication of a diamond's purity. Clarity is determined by the overall

number, size, and location of inclusions (flaws). The U.S. Federal Trade Commission

established the jewelry industry's standards for diamond clarity based on 10-power

magnification. As such, the appraiser assigned diamonds a clarity grade based upon

examination under a 10x binocular microscope equipped with dark field illumination.

The clarity grading scale is as follows:

FLAWLESS I.F. VVS¹¹ VVS² VS¹ VS² SI¹ SI² I¹ I² I³

INTERNALLYFLAWLESS

VERY VERY SLIGHTLYINCLUDED

VERY SLIGHTLYINCLUDED

SLIGHTLYINCLUDED

IMPERFECT EYE VISIBLEINCLUSIONS

CUTCut refers both to the shape of a diamond and the precise arrangement of its facets.

The most popular cuts are Round (AKA Brilliant), Pear, Marquise, Emerald, Oval,

Princess, and Heart.


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EXPLANATION OF FINE JEWELRY - DEFINITION OF TERMS(Continued from Page 13)

PEARLSAll articles of fine jewelry with pearls are examined by a Graduate Gemmologist and will

be described and identified accordingly. Articles of vintage and/or collectible jewelry

are examined by an antiques appraiser and valued as antiques rather than their value in

materials. Pearls are valued based on the following criteria when significant:

SHAPERound - well-matched, globular (most valuable)

Half-round - flat bottoms

Baroque - irregular

Fresh water - irregular

BODY COLORThere are six main body colors found in pearls: white, cream, pink, golden, black,

and green. Pearls are also found in blended color variations such as lavender,

silver, and gray. Pearls are ideally graded in natural daylight using a white

background. If natural light is unavailable, fluorescent light is the next best

lighting. Color evaluation of pearls is controversial as a value factor. While color

is significant, it is not granted over-importance in the final estimation of value.

The evaluation of color is more difficult and rather subjective, as there are

subtleties of market preference based on attitudes of specific clients and regional

preferences.

LUSTERPearls are rated according to the fineness of their luster. Luster is determined by

the intensity of the reflection found on the surface of a pearl which results from

light striking the surface. Luster is seen on a smooth surface where no ridges are

present to reflect the light in many directions. The more mirrorlike the surface

reflection of a pearl, the better the quality. In evaluating pearls, the appraiser

assigned a luster rating of very good, good, and fair.

MATCHMatch is an indication of continuity and quality in a strand of pearls. In a well-

matched strand, the pearls are similar in shape and give the viewer the overall

impression of evenness. A well-matched strand is given a higher value consideration

than one of mixed shapes. In evaluating a stand of pearls, the appraiser assigned a

match rating of very good, good, and fair.

BLEMISHESBlemishes, or spotting, are the wrinkles, cracks, gaps, bumps, or dull spots on the

surface skin of pearls. The most important criterion for assessing the value of a

pearl is the perfection of the skin, i.e., the lack of blemishes. As such, the

appraiser has indicated any apparent blemishes.

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EXPLANATION OF FINE ART BREAKABLE (FAB)AND BREAKABLE PERSONAL PROPERTY (BPP)

Fine Art Breakable and Breakable Personal Property items are indicated in

the report as "(FAB)" or "(BPP)" directly under the article number.

Fine Art Breakable (FAB) items include all items of glass, pottery, china,

terra cotta, and marble that have a fine art, antique, or collectible

nature.

Breakable Personal Property (BPP) items include all items of glass, pottery,

china, terra cotta, and marble residential contents that do not have a fine

art, antique, or collectible nature.

Mirrors are included as Fine Art Breakable (FAB) items if the plate is of

equal or more value than the frame or if a replaced plate would affect the

total value of the piece.

Vintage wine is not considered a Fine Art Breakable (FAB) unless otherwise

indicated. Wine will normally be considered as a Breakable Personal

Property (BPP) item except in the case of antique wine.

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EXPLANATION OF AUTHORSHIP AND ATTRIBUTION

GLOSSARYA George III mahogany linen press

Late 18th century

This heading and date indicate that in the appraisers’ qualified opinion the piece is

essentially of the period. Later restorations and alterations are indicated and

considered in the valuation.

A George III-style mahogany linen press

19th century

The heading and date with the word "style" included indicates that in the appraisers’

qualified opinion the piece is an intentional copy of an earlier design. Later

restorations and alterations are indicated and considered in the valuation.

FURNITURE PERIODS AND STYLES

Dates British Monarch U.K. Period French Period

1649 - 1660 Commonwealth Cromwellian Louis XIV (1643 - 1715)

1660 - 1685 Charles II Restoration

1685 - 1689 James II Restoration

1689 - 1694 William & Mary William & Mary

1694 - 1702 William III William III

1702 - 1714 Anne Queen Anne

1714 - 1727 George I Early Georgian Regence (1715 - 1723)

1727 - 1760 George II Early Georgian Louis XV (1723 - 1774)

1760 - 1811 George III Late Georgian Louis XVI (1774 - 1793)

Directoire (1793 - 1799)

Empire (1799 - 1815)

1812 - 1820 George IV Regency Restauration (1815 - 1830)

1837 - 1901 Victoria Victorian Louis Phillippe

2 Empire (1848 - 1870)nd

3 Republic (1871 - 1940)rd

1901 - 1910 Edward VII Edwardian Art Nouveau (1890 - 1920)

SIGNATURE

When a work is signed/dated/inscribed by the hand of the artist/craftsman, the appraiser

will state "Signed/stamped/incised..." exactly as written by the particular

artist/craftsman in the specific composition. This means that the appraiser believes the

work to be by the "signed" artist/craftsman.

When a signature/stamp/seal exists on a work, but the work does not appear to be by the

hand of such signed artist, the appraiser will indicate that the work "Bears

signature/stamp of...". This means that the appraiser does not believe the work to be by

the "signed" artist/craftsman.


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EXPLANATION OF AUTHORSHIP AND ATTRIBUTION(Continued from Page 16)

AUTHORSHIP GLOSSARY

TITLE - If a generally accepted title for the work exists, that title is given. If the

work is untitled or the title is unknown, a descriptive title may be assigned and is

indicated with an asterisk (*).

When provenance is unknown and a search of reliable sources fails to render information

concerning a particular artist or work involved, a value determination is based on

artistic merit and market conditions.

AUTHORSHIP - When a work is unsigned but generally accepted in the scholarly community

to be by a particular artist, that artist's name will be indicated as "Ascribed to...".

This is the highest category of authenticity.

When a question of doubt concerning authorship prevails, the authorship will be

indicated as "Attributed to..." a particular artist or a school.

When a signature exists on a work, but the work does not appear to be by the hand of

such signed artists, the appraiser will indicate that the work "Bears signature of...".

This means that the appraiser does not believe the work to be by the "signed" artist.

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GLOSSARY OF TERMS APPLICABLE TO THIS REPORT

abstraction - art which makes no direct, immediate discernible reference to

recognizable objects. In abstract art, the formal arrangement of colors and

forms is independent of, and more important than, the subject matter.

buyer's premium - a percentage of the bid ("hammer") price at an auction;

usually 5 - 20%.

canvas size - the actual size of a work on canvas where the edges are visible.

catalogue raisonné - a scholarly catalogue which should include all the known

works by an artist at the time of compilation; includes essential information

by which works are identified; the definitive reference book.

cradled panel - a restoration method used to support the back of a wood panel;

usually constructed in a series of horizontal and vertical wood pieces and

applied to the back of an old panel; keeps wood from serious warping, allowing

for natural expansion and contraction.

craquelure - the result of the uneven movements of the canvas caused by the

natural shrinking of the medium on aging; usually appears on the surface in a

"spider-web" like series of cracks. Surface can be stabilized by relining the

canvas and restoring the cracks.

estimate (est.) - the pre sale dollar amount suggested by an auction house at

which an object is expected to fetch at auction

expressionistic - a style of art characterized by distortions of line, shape,

and color based on an emotional reaction of the artist

gouache - an opaque watercolor. The effects achieved are closer to those of

oil paint than watercolor. A disadvantage of gouache is that it lightens as

it dries

hammer price - the actual "bid" price at an auction; does not include the

premium

impasto - paint applied with the consistency of thick paste

impressionistic - a style of art characterized by discontinuous brushwork or

an analytical approach to light on an object where strokes of color blend in

the eye to form the object

o/c - oil on canvas

patinated - a finish often applied to bronzes to add color; usually in green,

brown, black, or gold

reserve - the agreed upon minimal amount at which an item can be sold at

auction


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GLOSSARY OF TERM S(Continued from Page 18)

seller's premium - a percentage of the bid ("hammer") price at an auction;

usually 5 - 15%. It is usually more negotiable than the buyer's premium.

surmoulage - a cast from a cast

TAM - Tax Advisory Memorandum

terra cotta - a medium used in creating sculptures. It is fired clay, modeled

or moulded, and baked until it is very hard. Terra cotta has been used since

ancient times for pottery and sculpture, and as a building material. It may

be coated with a glaze of molten glass, painted, or left untreated.

watermark - design left in the paper by the paper manufacturer; seen when held

against the light; used to trace the origin of the paper; special markings for

an artist or publisher may incorporate a signature or a device; can be used to

detect fakes -- although it can be faked.

w/c - watercolor

work size - the actual size of a work on board or paper where the edges are

visible

work size (sight) - the visual size of a work on board, paper, or canvas,

usually measured in a frame and not knowing the extend of the margins/edges

under the frame

unsold - an artwork that did not sell at auction. The most common reason items

are unsold is because the item failed to reach its reserve (AKA “buy-in” or

“bought-in”). Other reasons an item is unsold could be that the item was

withdrawn based on ownership or authenticity, or that the consigner changed

their minds.

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DISCLAIMERS, LIMITING CONDITIONS AND ASSUMPTIONS

This certificate of appraisal is given, subject to the terms and conditions

hereinafter set forth, all of which are a part hereof unless expressly set aside in

writing either on the pages of this certificate or by writing attached to the

certificate signed by all parties concerned.

This appraisal consists of XX pages and must be presented in its entirety to be

valid.

This appraisal is prepared solely for insurance purposes using the comparative

market approach to arrive at the retail replacement values as of June 1, 2008.

It is to be used by Dr. Diane Pill and Mr. Justin Case and solely by them for

insurance purposes. This report can be used by an insurance company / agent /

broker / underwriter / adjustor as designated by Dr. Pill and Mr. Case .

The client shall indemnify, defend, and hold us harmless from and against any

actions, claims, liabilities or expenses incurred as a result of claims based on or

arising from the appraisal, by third parties unrelated to the immediate purpose of

this appraisal.

Unless otherwise stated herein, this certificate is based only on the readily

apparent identity of the items appraised, and no further opinion nor guarantee of

authenticity, genuineness, attribution, or authorship is made. However, in

appraising the subject articles, the appraisers found no reason to question the

authenticity of the articles (See also Scope of Work).

Some descriptive information pertaining to the work was supplied by the client,

through standard reference material, and the internet. No reported scientific

and/or laboratory testing has been performed on any articles.

The appraised value is based on the whole ownership and possessory interest

undiminished by any liens, fractional interests or any other form of encumbrance or

alienation.

This certificate is made at the request of the party named for their use. It is not

an indication or certificate of title ownership. The identification of the interest

of the requesting party is simply that represented to the appraisers by such party

and no inquiry or investigation has been made nor is any opinion given as to the

truth of such representation.

The values expressed herein is based on the appraisers’ best judgment and opinion

and are not representations or warranties that the items will realize these values

if offered for sale at an auction or otherwise. The values expressed are based on

current information on the assigned effective date stated on the cover page of this

report. No opinion is hereby expressed as to any future value, nor unless otherwise

stated, as to any past value.


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The appraisers considered the highest and best use of the appraised articles with

respect to the most appropriate, common, and legal marketplace given the purpose of

the appraisal.

The appraisers have no past interest, no present interest, nor any contemplated

future financial interest in the appraised property. The appraisers do not have any

personal interest or bias with respect to the parties involved. This appraisal was

done objectively and in accordance with the 2008-2009 Uniform Standards of

Professional Appraisal Practice and the Appraisers Association of America. Further,

the appraisers have no other interest which might tend to prevent making a fair and

unbiased appraisal.

This appraisal was researched and prepared by the appraisers named on the cover page

of this report. Supplemental research was supplied by office assistants and interns

at APPRAISAL COMPANY NAME, particularly ----- ----- and ------ ----. No other

person supplied significant assistance in preparation of this report.

Some information regarding provenance was limited to hearsay. Minimal primary

information regarding exhibition and literary history of the articles were made

available by the client to the appraisers. Any factual and/or hearsay information

provided by the client is assumed to be correct, however, the appraisers are not

responsible for any errors or misrepresentations on the part of Dr. Pill or Mr.

Case.

The appraisers did not personally examine any of the comparable sales and/or

offerings with regard to these particular works. The appraisers are relying on

information made available through price databases and gallery inventories regarding

authenticity, condition, and sales information concerning these works.

Consulting sources are listed in the back of the report. Information furnished by

consulting sources is assumed to be reliable, but is not guaranteed by these

appraisers or their firm.

The appraisers are not required to give testimony, be present in any court of law,

or appear before any commission or board by reason of this appraisal, unless prior

arrangements have been made with the appraisers. Should this report be challenged

in anyway, not limited to litigation, it is understood that the appraisers are

prepared to defend their appraisal, if required. Courtroom testimony, mediation

proceedings, and the necessary preparation are considered to be separate assignments

and will be billed at our then current normal hourly rate plus expenses as required.

Possession of this report, or copy thereof, does not include the right of

publication without the written consent of the appraisers and their firm. This

report in its entirety, or any part thereof, including the identity of the

appraisers or their firm, shall not be made public through advertising, public

relations, news releases, sales, or other distributive or information media without

the written consent of the appraisers and their firm.


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Copies of this appraisal and notes pertaining to the appraisal, written and

electronic, will be kept in the offices of COMPANY NAME for a minimal period of five

(5) years after the date of issue or two (2) years after final disposition of any

judicial proceedings involving the appraisers, whichever period expires last.

APPRAISAL COMPANY NAME will make every effort to store client records in a safe and

secure environment. However the firm is not responsible for acts of war, terrorism,

or other such unexpected catastrophes which may affect the safekeeping of this

report.

All matters treating the duties, responsibilities, and liabilities of the appraisers

are in accord with the Valuation Standards and Professional Practices as outlined

by the Appraisal Foundation in the 2008-2009 Uniform Standards of Professional

Appraisal Practice and the Principles of Practice and the Code of Ethics of the

Appraisers Association of America.

© 2009 APPRAISAL COMPANY NAME. All Rights Reserved. None of the contents of this appraisal report may be reproduced, stored in aretrieval system or transmitted in any form or by any mean (electronic, mechanic, photocopying, recording or otherwise) without the prior writtenpermission of APPRAISAL COMPANY NAME and the appraisers' signature.

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MARKET ANALYSIS

Given that the art and antique markets are always volatile markets, an overall market

valuation forecast cannot be established. Particularly with the uncertain political

and economic situation of the world after September 11, 2001, a market analysis is

difficult to prepare in these uncertain times.

However, based on an analysis of the market since 2000 and a presumption of a future

relatively stable growth, it could be concluded that certain areas have and will

appreciate at a greater rate than others. Until this year, American art has been one

of the areas that has been doing quite well on the primary and secondary markets.

However, given the current state of the American economy, we have been currently

experiencing a dip in the market. This is felt throughout the art market, however,

the American market is hit the hardest as most patrons are Americans and cannot look

to the global market for buyers as relied upon by the

Modern and Contemporary markets.

ArtPrice has compiled indicators for the auction sales

of Benton. According to Figure 1, works by Benton

appear to be on a decline. However, because of a

weakened economy, collectors are reluctant to sell

their works in this market. Hence no fabulous works

have appeared to teeter the trend. According to this

chart, works by Benton are down by 57%. Speaking with

galleries, such as Hirschl and Adler or Spanierman,

they dispute this data, saying that there is good art

available, but one must search for it in this

uncertain economy.

Internationally, it has been a different story. The Impressionist and Modern Art

Evening Sale of June 24, 2008 at Christie’s generated £144 million ($284 million), the

largest sales volume ever posted by a European auction.

The following day, Sotheby's took £102 million,

exceeding its aggregate high estimates by seven

million. In New York, during the May sales, Christie’s

and Sotheby’s achieved proceeds of $1.2 billion. Works

by Monet, Bacon, and Freud sold in the past few months

have been snapped up as trophy purchases by Tania

Buckrell Pos or the Russian billionaire Roman

Abramovich, serving as barometers for the whole market,

as did the works of Renoir and Van Gogh during the 1990

speculative bubble. Once again, the high-profile

Christie’s and Sotheby’s sales, which represent just

1/1000 of global transactions seem to be setting the

tone for the broader market. The following chart

represents activity in French Impressionism relating to your Monet, Renoir, Fantin

Latour, and Maillol. Note that we are at the levels of the height of the market in

1990.


Figure 1 - TH Benton Activity 1998-2008

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M ARKET ANALYSIS

(Continued from Page 23)

That said, the confidence indicator for players in the art market has been falling for

over a month. Having peaked at +31 points at the end of May following the excellent

results from the May New York sales, this indicator has

gradually turned down…haunted by the ghost of an

unprecedented global economic recession. With oil prices

surpassing $140/bbl, the cost of the subprime crisis

continues to rise, real estate values have dropped

practically everywhere in the world, the financial markets

continue their relentless correction, inflation is becoming

galloping, growth forecasts are looking increasingly

pessimistic…Yet for all that, the art market is still

showing signs of resistance, defying the other poorer

performing sectors of the global economy. In such an

environment, the million-pound proceeds recorded in the

highly prestigious Christie's and Sotheby's London sales look nothing short of

miraculous.1

Aside form the artwork, much of your furniture is finely made custom furniture or

craft items, which commands high prices in the primary market due to its craftsmanship

and uniqueness. These pieces rarely retain their value on the secondary market,

particularly in one’s lifetime. However, these works will undoubtedly be appreciated

in the generations to come.

Given your specific collection and based on general and specific market volatilities,

these appraisers recommend that a general appraisal update should be conducted in at

least two years to adequately protect yourself for insurance purposes.

Please note that the appraisers do not guarantee any prices or predictions for values

in the future.

SAMPLE REPORT



CONTACT INFO


25

TOTAL VALUE

SCHEDULE OF FINE AND ANTIQUE SILVER $ -,---.00

SCHEDULE OF FINE AND DECORATIVE ART $ ---,---.00

SCHEDULE OF FINE ART BREAKABLE (FAB) $ ---,---.00

GRAND TOTAL $ -,---,---.00

SAMPLE REPORT



CONTACT INFO


26

VALUE BREAKDOWN - BY LOCATION

SCHEDULE OF FINE AND ANTIQUE SILVER $ -,000.00

Total $ -,000.00

SCHEDULE OF FINE AND DECORATIVE ART

Entry Foyer $ ---,000.00

Entrance Sitting Room ---,000.00

Library Powder Room -,000.00

Living Room ---,000.00

Dining Room ---,000.00

Storage / Dining Room --,000.00

Television Room -,000.00

Pantry Closet --,000.00

Kitchen and Hall --,000.00

Loose Posters --,000.00

Total $ -,---,---.00

SCHEDULE OF FINE ART BREAKABLE (FAB)

Entry Foyer $ ---,000.00

Entrance Sitting Room ---,000.00

Library Powder Room -,000.00

Living Room ---,000.00

Dining Room ---,000.00

Storage / Dining Room --,000.00

Television Room -,000.00

Pantry Closet --,000.00

Kitchen and Hall --,000.00

Loose Posters --,000.00

Total $ -,---,---.00

Total $ ---,---.00

GRAND TOTAL $ 000.00

SAMPLE REPORT



CONTACT INFO


27

SCHEDULE OF FINE ART

FINE ART SILVER

ArticleNumber

AppraisedValue

Description

1. $ 000.00

Piece

An American sterling silver footed compote of modern form, the

flared circular top raised on a short ringed stem below a

spreading circular foot

Tiffany and Company, New York

After 1951

Marked Tiffany and Company Makers Sterling Silver 23356M

Height: 4¼ inches Diameter at top: 12½ inches

Weight: 47 troy ounces

Condition: Good.

Note: Discontinued.

Photo 1

2. $ 000.00

Piece

An American sterling silver two (2)-handled presentation tray of

oval shape having a scrolled “C” curve border continuing to form

openwork handles and slightly scalloped border dropping to a

recessed bowl; commemorating the service of -------------, signed

by six (6) fellow directors, each a prominent member of the world

of finance and business, incised ----------

Hampton Court

Pattern 666

Reed & Barton, Taunton, Massachusetts

Circa 2000

Marked on verso Hampton Court, Reed & Barton, Sterling X 666

Length of tray: 24½ inches Width of tray: 17 inches

Condition: Good.

Note: Presently located in the Living Room.

Photo 2

SAMPLE REPORT



CONTACT INFO


FINE ART SILVER

28

3. $ 000.00

Part service

A partial service of American sterling silver flatware, each piece

of a simple form with plain tapered handles and rounded terminal

Hannah Hull

Tuttle, Boston

1927 - 1974

Comprising: Per piece

Twelve (12) teaspoons $ 118.00

Sixteen (16) salad forks 135.50

Four ( 4) luncheon forks 135.00

One ( 1) gravy ladle 92.00

One ( 1) pierced cranberry/tomato server 92.00

One ( 1) pie server 92.00

One ( 1) serving spoon 92.00

A total of thirty-six (36) pieces

Condition: Good.

Notes: Pattern was bought from Tuttle by Wallace. Current as a

Wallace pattern. Earlier Tuttle pieces more valuable than

Wallace pieces.

Photo 3

4. $ 000.00

Piece

An Italian sterling silver bread knife with an open twist sterling

handle and serrated stainless steel blade

Padova by Elsa Peretti

Distributed by Tiffany and Company, New York

After 1994

Marked Peretti Tiffany & Co. Sterling Italy 1994

Overall length: 11 inches Length of blade: 7 inches

Length of handle: 4 inches

Condition: Good.

Photo 4

??

SAMPLE REPORT



CONTACT INFO


29

ENTRANCE AND CENTER HALL GALLERY

ArticleNumber

AppraisedValue

Description

5. $ 000.00

Piece

The ----

A mixed media bronze sculpture depiction of a seated woman wrapped

in a blue cloth, having iridescent eyes, wearing stilettos and

holding a round stone with her lap

Polychromed bronze and painted fabric

K------ L. ------ (American, born 1963)

No visible signature

Height: 22¼ inches Width: 10½ inches Depth: 12 inches

Provenance: Purchased directly from the artist Sale - 1994

Condition: Good.

Photo 5

6. $ 000.00

Piece

An American handcrafted wood abstracted functional standing floor

clock, the clock face section in the form of a natural-colored

blossom with gilded hour and minute hands, raised on a flared

stand of polychromed sections

Prime Time

Polychromed wood (Jelutong)

----- ----- (American, born 1952)

Executed 1996

Signed ----- and dated 96 near bottom

Work size: 93½ x 40 x 21 inches

Condition: Good.

Photo 6

7.

(FAB)

$ 000.00

Piece

Pink Basket with Wrap

A free-blown glass vase decorated with yellow, pink and aubergine

glass threads

--- --- ------ (American, born 1946)

Executed 1998

Number ---.--.--

Script signed ------ and dated 1998

Height: 10 inches Diameter 8 inches

20 century period frameth

Literature: History unknown

Condition: Good.

Photo 7

SAMPLE REPORT



CONTACT INFO


ENTRANCE AND CENTER HALL GALLERY

30

8. $ 000.00

Piece

A large custom-ordered tufted wool area rug of rectangular shape,

the striped field worked in various alternating colors of orange,

olive, purple, and blue, some with dentil-form design, within an

orange border

Syncopation/melange area rug with Quantum border

Late 20 centuryth

15 feet x 6 feet, 11 inches (180 inches x 83 inches)

Provenance: ---- Carpet, -----, New Jersey

Sale - February 3, 1995

Condition: Good.

Photo

0

SAMPLE REPORT



CONTACT INFO


http://encyclopediaofarkansas.net/encyclopedia/entry-detail.aspx?entryI2

D=2333

31

HALL GALLERY

ArticleNumber

AppraisedValue

Description

9. $000.00

Piece

--------

A genre scene depicting two (2) women in a canoe on a river,

surrounded by cliffs at left and distance and trees on sandy

shore at right

Egg tempera on masonite

Thomas Hart Benton (American, 1889 - 1975)

Executed 1969

Signed Benton and dated ‘69 at lower left

Work size: 16 x 20 inches (sight)

Reported size: 18 x 23 inches

Framed size: 26 x 31 inches

20 century distressed gilt cove-moulded carved wood frameth

Provenance:

Rita Benton (artist’s wife), Kansas City

Christie’s, New York, November --, 19--, lot 1–

Unknown owner

---- Gallery, New York Sale - April --, 200-

Literature:

Matthew Biagell, Thomas Hart Benton, New York, 1973, number --

Condition: Good.

Notes: ---- Gallery label indicates it measures 18 x 23 inches.

Starting about 1965, Benton made annual trips to float the ----

River with a group of friends from Kansas City. Sometimes he

fished or swam, but invariably he carried a sketch pad with him.

He painted some of his best late works during this period,

including ------- .2

Highest price paid at auction for a Benton painting:

05/24/06 - Sotheby’S, NY, lot 125, Keith Farm, Chilmark, 1955,

o/board, 21 x 29, est. $350,000-550,000; sold $1,808,000

Auction comparables:

05/24/06 - Sotheby’S, NY, lot 125, Keith Farm, Chilmark, 1955,

o/board, 21 x 29, est. $350,000-550,000; sold $1,808,000

11/30/05 - Sotheby’s, NY, lot 27, Jon Boat - Buffalo River,

o/panel, 12 x 10, est. $100,000-150,000; sold $340,800

05/22/03 - Christie’s, NY, lot 80, Shooting the Rapids, 1973, o/c,

20 x 24, est. $200,000-300,000; sold $377,100

Photo 9

??

SAMPLE REPORT



CONTACT INFO


http://www.si.edu/Encyclopedia_SI/nmah/guarneri.htm3

32

SCHEDULE OF MUSICAL INSTRUMENTS

ArticleNumber

AppraisedValue

Description

10. $ 000.00

Piece

A Continental handcarved violin; together with a later bow and

leather case

Bears label that is typed Joseph Guarnerius fecit Cremonae anno

1710

19 centuryth

Overall length: 23 3/8 inches

Condition: Good.

Notes: Stradivari and Guarnerius are ranked as the greatest of

violin makers, and some fine violinists prefer the instruments of

Joseph Guarnerius del Gesu to those of Stradivari. The most

illustrious member of this famous family of violin makers was

Bartolomeo Giuseppe Guarneri (Cremona, Italy, 1698 - 1744), the

fifth and last member of the family, grandson of Andrea, son of

Giuseppe Giovanni Battista. He is more familiarly known as

Joseph Guarnerius del Gesu. Guarnerius is the Latin form of the

family name and Joseph the Hebrew form of Giuseppe. The addition

of "del Gesu" to the name and the Greek abbreviation for Jesus

(IHS) beneath a cross on the labels indicate veneration for the

Holy Name. The outline of his violins, with slight

modifications, is founded on instruments of Antonio Stradivari.

Modeling of the back and table are noticeably flattened,

seemingly inspired by Maggini. The F holes are of Stradivari

form but are usually elongated, more open, and less refined. The

carefully applied oil varnish is soft in quality and of light

texture, with the color varying between pale orange and orange-

brown with, occasionally, a reddish tint. The length of the body

is usually 13 7/8", sometimes 1/16" less. The estimate of his

total production is not more than 250 violins; there is no

positive evidence that he made instruments in any other form,

although some violas and at least one violoncello are attributed

to him. Approximately 150 violins are known to exist. Cremonae3

violins began to be copies in the 1840s by the thousands and sold

throughout the world. Due to the size, age, and quality of this

piece, it is probably a 19 century copy.th

Photo

??

SAMPLE REPORT



CONTACT INFO


33

SOURCES


_____. American and European auction catalogues, 1987 - 2008.

_____. Annual Guide to Galleries, Museums, Artists. New York: Art in America,

1995 - 2008.

_____. Guide to Exhibited Artists: Craftsman. Oxford, England: Clio Press,

1985.

_____. Joichi Hoshi, Catalogue of All Tree Woodblock Prints 1970 - 1979.

_____. Uniform Standards of Professional Appraisal Practice and Advisory

Opinions. 2008 - 2009 Edition. Washington, D.C.: Appraisal Standards Board,

2007.

Adams, Henry. Thomas Hart Benton. New York: Knopf, 1989.

Albertu, Rafael. Picasso en Avignon, Editions Cercle d’Art, Paris, 1971.

Alden, Aimee Neff. The Collector's Encyclopedia of Early Noritake. Paducah,

Kentucky: Collectors Books, 1997.

Barry, John W. American Indian Pottery. Florence, Alabama: Books Americana,

1984.

Biagell, Matthew. Thomas Hart Benton, New York, 1973.

Brewer, Robin. Noritake Dinnerware: Identification Made Easy. Atglen,

Pennsylvania: Schiffer Publishing Ltd., 1999.

Canadian Eskimo Arts Council. Sculpture/Inuit. Toronto: University of Toronto

Press, 1971.

Carmichael, Suzanne. The Travelers Guide to American Crafts West of the

Mississippi. New York: Dutton, 1990.

Carpenter, Charles H., Jr. with Mary Grace Carpenter. Tiffany Silver. San

Francisco: Alan Wofsky Fine Arts, 1997.

Constable, W. G., ed. Summary of European Paintings, Boston, 1955.

Cunningham, C. C. “From Gainsborough to Renoir: Boston Exhibits its New Gift of

the J.C. Edwards Collection”, Art News, Number 38, December 9, 1939.

SAMPLE REPORT



CONTACT INFO


34

THE FOLLOW ING GALLERIES, EXPERTS, AUCTION HOUSES, AND RETAIL SHOPS,

W ERE SPECIFICALLY CONSULTED:

Albemarle Gallery, London

Arden Gallery, Boston

Bonhams & Butterfield, San Francisco

Christie’s, New York and London

Doyle, New York

Elliot / Brown Gallery, Seattle

Foster / White Gallery, Seattle

Gallery Old Town, San Diego

Godel Fine Art, New York

Hirschl & Adler, New York

Massol, Paris

Monroe Gallery of Photography, Santa Fe

Samuel T. Freeman and Company, Philadelphia

Scriptum, Berkeley, California

Skinner, Inc., Bolton, Massachusetts

Sloan’s, Washington, D.C.

Sotheby’s, New York and London

Spanierman Galleries, New York

Swann Galleries, New York

Tiffany and Company, New York

Vose Galleries, Boston

THE FOLLOW ING INTERNET SITES WERE SPECIFICALLY CONSULTED:

www.afterimage.com

www.artfact.com

www.artnet.com

www.artprice.com

www.askart.com

www.castlefinearts.com

www.christofle.com

www.ebay.com

www.gordonsart.com

www.idburyprints.com

www.michaelcfina.com

www.replacements.com

www.silversuperstore.com

www.sothebys.com

www.upscalegallery.com




http://www.artprice.com

http://www.art-sales-index.com

http://www.askart.com

http://www.auctioninsantafe.com

http://www.castlefinearts.com

http://www.christofle.com


http://www.idburyprints.com

http://www.michaelcfina.com

http://www.replacements.com

http://www.silversuperstore.com

http://www.sothebys.com

http://www.upscalegallery.com

http://www.upenn.edu

http://www.vietnameseartonline.com

SAMPLE REPORT


Estate of Mr. Zen Date of Death 02/02/08"Fair Market Values” Self-Contained Estate Appraisal Page 1 of 39

1

APPRAISERS’ CERTIFICATION

COMPANY NAME is a registered firm of appraisers qualified to appraise residential

contents, fine art, and antiques. In 199*-200*, APPRAISER’s NAME, AAA, examined and

photographed the majority of the articles listed herein. APPRAISER’s NAME appraised all

items of Fine Art and reviewed all appraised values of all items for insurance purposes.

Her examination and appraisal of Fine Art items was assisted by APPRAISER 2. APPRAISER

3 and APPRAISER 4 also examined and appraised items of antique furniture, silver, rugs,

and general contents. APPRAISER 5 assisted in the examination of general contents and

insurance appraisal in 2005. Periodically since 2000, APPRAISER’s NAME visited the MR.

ZEN’S home to examine new acquisitions, appraise for insurance purposes, and review the

condition of various items.

Upon the death of Mr. ZEN, APPRAISER’s NAME was asked to review the collection for estate

purposes. In September 2008 NAME, GG examined and appraised all items of jewelry. These

items were also examined and photographed by APPRAISER’s NAME.

APPRAISER’s NAME, AAA, the chief appraiser signed below, has not now nor has ever been

disqualified by the IRS from preparing IRS appraisals. Nor have any of the COMPANY’S NAME

appraisers ever been disqualified by the IRS from preparing IRS appraisals.

The appraisers, without any past, present, or contemplated future interest which might

tend to prevent a fair and unbiased appraisal, declare the current fair market value of

each item. Valuation is based solely on personal research and analysis of comparative

market data as performed by the appraisers and office assistants at COMPANY NAME as of

date of death, February 2, 2008 . Although the statements of fact contained in this

report are true and correct, the values expressed herein are based on the appraisers’ best

judgement and opinion and are not representations or warranties that the items will

realize that value if offered for sale in the United States. No other party was

significant in the examination or valuation of the appraised property.

Compensation for this appraisal is not contingent upon the arrived valuation. Fee is

based on an hourly rate plus expenses. Further, compensation is not contingent upon the

reporting of a predetermined value or direction in value that favors the cause of the

client, the amount of the value estimate, the attainment of a stipulated result, or the

occurrence of a subsequent event.

The objective of this report is to provide an unbiased fair market value guideline to be

used as a basis to establish estate taxes for a taxable estate with a surviving spouse.

The appraisers understand that this appraisal will be used in connection with an estate

tax return and for potential capital gains, and that a substantial or gross valuation

misstatement resulting from this appraisal may subject the appraisers to a civil penalty

under Section 6695A of the Internal Revenue Code.


SAMPLE REPORT



2


Photographs and/or digital images are included in this report for reference only. The

client is responsible for obtaining the appropriate photographs if requested by the

Internal Revenue Service.

This is a partial contents appraisal. Appraisers only valued items as indicated by the

estate.

This report has been written according to the rules of the 2008-2009 USPAP (Uniform

Standard of Professional Appraisal Practice). This appraisal is considered to be a

“retrospective” self-contained appraisal report as the appraiser conducted her research

during the Fall of 2008, 6-7 months after the date of death. Although the appraiser

conducted her research in Fall 2008, the effective valuation date is the “retrospective”

date of death, ----- --, 2008

Although this certification page includes salient information regarding the methodology

of the report, additional information regarding the scope of work, assignment conditions,

and disclaimers are important to understand the entire appraisal process. As such, the

entire report is required to fully understand the assignment and this certification page

encompasses the entire report and is not valid without reading and understanding the

entire report.

Total pages of report:

Total number of articles appraised:

Total number of photographs: (Numbered to___ plus addendum photos)

Examination dates: November 11 and 15, December 9, 199*, January 31, and February 3,

2000, May 2, 200*, February 16, 200*; September 4, 200*

Research dates: February 14, 200* - March 11, 2001; May 2 - 9, 200*; February 16 - July

15, 200*; January 15 - June 22, 200*; August 10 - October 3, 200*

Date of death: February 2, 2008

Effective valuation date: February 2, 2008

Issue date of report: October 15, 2008

APPRAISER’s NAME, AAA (Fine Art Appraiser)

Appraisers Association of America,

Certified Member

(Taxpayer ID# #########7)

APPRAISER NAME, GG (Jewelry)

Graduate Gemmologist

(Taxpayer ID# #########)

SAMPLE REPORT



3

CV’S for each appraiser who signs the report

SAMPLE REPORT



4

TABLE OF CONTENTSAppraisers’ Certification Page 1 - 2

Appraisers’ Qualifications Pages 3 - 3A

APPRAISER NAME, AAA Page 3

APPRAISER NAME, GG Page 3A

Table of Contents Page 4

Scope of Work Pages 5 - 11

Explanation of Authorship and Attribution Pages 12 - 13

Explanation of Silver, Gold, and Jewelry Page 14

Explanation of Fine Jewelry, Definition of Terms Pages 15 - 16

Disclaimers, Limiting Conditions and Assumptions Pages 17 - 19

Market Analysis Pages 20 - 21

Total Value Page 21

Appraised Articles

Silver

Articles 1 - 2 Page 23

Entry Foyer

Articles 3 - 4 Pages 24 - 25

Powder Room


Living Room


Library

Article 9 Page 28

Mr. Zen’S Office

Article 10 Page 29

Dining Room


Kitchen and Hall

Articles 13 Page 31

Master Bedroom


Son’s Bedroom


Jewelry

Article 20 Pages 36

Sources Pages 37 - 39

References Books and Price Guides Page 37

Galleries, Experts, Auctions, and Retail shops Page 38

Websites Page 39

SAMPLE REPORT



5

SCOPE OF WORK: APPRAISAL METHOD AND DEFINITION OF VALUE

PROBLEM TO SOLVE: The appraisers were asked to re-appraise a collection of artwork and

antiques and a few items of jewelry belonging to an estate. Although in May 2008, the

appraisers had prepared an updated insurance appraisal with retail replacement values for

the wife of deceased, the estate requires this appraisal with fair market values in order

to complete their estate tax filings and to set a cost basis to be used in the event of

potential capital gains resulting from the sale of these items. This appraisal with

photographs will be sent to the executor of the estate. With client’s

approval/permission, this appraisal report will be sent to their designated

attorney/accountant. The executor is advised to keep a copy of the appraisal for their

records. This report is not valid for any other purpose.

CATEGORIES OF ITEM EXAM INED : American, European, Asian art; American, English, Continental,

Asian antiques; Persian rugs; maps; autographs; silver; china; fine crystal; household

contents

CLIENT: The owner of the collection, the estate of MR. ZEN.

OW NER OF COLLECTION: The client, the estate of MR. ZEN.

USE OF APPRAISAL: Estate filing / potential capital gains.

USER(S) OF APPRAISAL: This appraisal can be used and relied upon by the executor for the

estate, a designated attorney/accountant, and the Internal Revenue Service. Any other

user is considered an unintended user.

EFFECTIVE VALUATION DATE OF APPRAISAL: The value expressed in this appraisal is effective as

of the date of death, Month Date, Year

OW NERSHIP INTEREST / ART LOSS REGISTER: The question of title was not an issue. The estate had

acceptable provenance records for most items. As such, the executor and the appraisers

did not pursue title searches with the Art Loss Register.

AUTHENTICITY: Although the appraisers are not authenticators, the question of authenticity

was not an issue for the appraisers in the valuation of this collection due to the

supporting documentation.

SPECIFIC ASSIGNM ENT CONDITIONS - GENERAL: Although the appraisers periodically visited the ZEN’S

home, the appraisers did not completely re-examine all of the works since the original

1999-2000 appraisal. The appraisers assume the works in this appraisal are in comparable

condition as they were during the original 19**-200*, 200*, 200*, and 200* examinations,

except as noted.


SAMPLE REPORT



6


The appraisers were given adequate time to research the items. Appraisers were given

significant documentation for these articles while preparing the original appraisals in

1999-2000, 2003, 2005, and 2008.

SPECIFIC ASSIGNM ENT CONDITIONS (ASSUM PTIONS): The appraisers assume all mediums to be as

reported. A scientific analysis of the chemical compounds was not conducted as it was not

an issue relating to valuation.

SPECIFIC ASSIGNM ENT CONDITIONS (EXTRAORDINARY ASSUM PTIONS): The appraisers assume the information

provided by the client to be correct.

The appraisers assume the works previously examined are the same works which are the

subject of this appraisal.

The appraisers assume the works described and pictured herein are the pieces which are the

subject of this appraisal and that these articles will not be substituted with other

articles by the estate.

The appraisers assume authorship to be authentic, including signatures to be by the named

artists.

Natural gemstones are processed from the time they are extracted from the earth by one or

more traditionally accepted methods. Therefore, unless otherwise stated, all colored

stones are presumed to have been subjected to a stable and possibly undetectable

color/clarity enhancement process. Value conclusions are based on these universally

practiced and accepted processes.

Marks on objects (trademarks, signatures, makers’ marks, serial numbers) may affect the

value of a piece. For the purpose of this appraisal, the appraisers assume that all

markings are authentic, unless otherwise indicated (also considered a limiting condition).

The appraisers assume these works were previously purchased in appropriate markets without

any unusual market stimuli affecting their sale.

The appraisers assume the estate retains full title to works.

SPECIFIC ASSIGNM ENT CONDITIONS (LIM ITING CONDITIONS): The appraisers did not remove all works from

the wall due to their size or location. Items not removed from the walls will be

indicated as such in the individual entries. The appraisal of these items is limited by

what appears on the recto (also considered an Extraordinary Assumption).


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7


The appraisers did not remove any works from their frames or mounts. The appraisal is

limited by what appears within the frame and matte (when applicable) (also considered an


The appraisers did not remove any upholstery to thoroughly examine for signature,

markings, and conditions. The appraisal is limited by what appears within the frame and

matte (when applicable) (also considered an Extraordinary Assumption).

Only when physically possible, did the appraisers examine undersides, and back rails of

furniture for signatures and condition (when applicable) (also considered an Extraordinary

Assumption).

Only when physically possible, did the appraisers remove drawers to examine for signatures

(when applicable) (also considered an Extraordinary Assumption).

Only when physically possible, did the appraisers move heavy furniture to thoroughly

examine for signatures and condition (when applicable) (also considered an Extraordinary

Assumption).

Only when physically possible, did the appraisers lift stone slabs atop furniture to

examine for signatures and condition (when applicable) (also considered an Extraordinary

Assumption).

The appraisers did not examine or test the workings of clocks for accuracy and precision

(when applicable) (also considered an Extraordinary Assumption).

The appraisers did not test any metals for the silver/gold content. The appraisers relied

on the validity/authenticity of the silver/gold markings (also considered an Extraordinary

Assumption).

The appraisers did not remove any stones from their mounts. The weight, grade, color, and

clarity may be limited by the “in mount” examination. As such, this appraisal is limited

by what appears within the mount (also considered an extraordinary assumption).

The appraisers are not authenticators. As such, in certain cases the appraisers may

recommend authentication of specific marks. Authentication of this nature is not the

responsibility of the appraisers (also considered an extraordinary assumption).


SAMPLE REPORT



8


When examining diamonds and colored stones, every reasonable effort has been made to

determine the existence of a fracture filling, clarity, or color enhancement process.

However, no binding representation can be made in all circumstances as to the existence

or nonexistence of such process. Enhancement procedures are often undetectable through

the use of a standard portable laboratory. Detection of enhancements is limited by the

gemological equipment used (also considered an Extraordinary Assumption).

The appraisers are not conservators or jewelry repair technicians. As such, they did not

prepare a condition report. This report is limited by the appraisers’ visual inspection.

No other condition report was supplied (also considered an Extraordinary Assumption).

SPECIFIC ASSIGNM ENT CONDITIONS (HYPOTHETICAL CONDITIONS): No Hypothetical Conditions were relevant

to this report.

M ETHOD OF EXAM INATION OF ART AND ANTIQUES: APPRAISER’s NAME, AAA, the chief appraiser, examined

and photographed all items in this report. APPRAISER 2, APPRAISER 3, and APPRAISER 4

conducted further examination of specific items.

The items were examined in a household setting, using daylight, incandescent light, and

occasionally a flashlight. These conditions were considered minimal to adequate, not

optimal. A minimal number of items were examined under a black light by the appraisers

due to location and brightness of the environment.

Examination of fine art and antiques consisted of a visual inspection to identify medium,

style, quality, date, size, and condition of works.

Signature, markings, and labels were noted if found.

Most works have been measured. Measurements are given to the nearest 1/8 inch; height

precedes width unless otherwise stated.

The appraisers assigned a general condition report to each object. “Condition” refers to

what is considered generally acceptable, with ordinary wear and tear for its type, unless

otherwise noted.

M ETHOD OF EXAM INATION OF JEW ELRY: APPRAISER’s NAME, AAA, briefly examined the items in a

household setting while photographing the collection.


SAMPLE REPORT



9


Mr. GEMOLOGIST more thoroughly examined and evaluated the items in this appraisal by using

the accepted standards of the jewelry industry and those of the Gemmological Institute of

America. Data was collected “on site” and in accordance with those standards by using

careful observation and professional equipment. Items were examined through one or more

of the following devices/equipment: a portable Gemmological laboratory, an American

Optical 570 Binocular Microscope with 10x-63x magnification, 10x loupe, a fiberoptic probe

illuminator (with monochromatic filter), long and short wave ultraviolet (UV)

fluorescence, Rayner Refractometer, dichroscope, spectroscope, electronic scales,

leveridge gauge, G.I.A. Gem Set, Gem Dialogue Color Comparison, Diamond Grading Light

Source, G.I.A. diamond master comparison stones, and a metal testing kit.

The quality grade of any gemstone is restricted by various types of mountings, settings,

and lighting conditions. This quality grade of any gem may differ if it is removed from

a mounting and/or examined under a different light source. However, in order to

standardize the examination environment, the jewelry industry has prescribed the use of

“special” lighting. The prescribed light sources were used in this examination. This

includes both a diamondlite (north daylight equivalent) and a fiber optic probe

(monochromatic light source). Additionally, when appropriate, long/short wave (UV)

fluorescence was used to aid in the authentication of diamonds and colored stones.

Metal quality of finished jewelry cannot be conclusively established by the gemologist

appraiser. Common industry practice suggests that metals be identified by acid testing,

test needles and rub stones as well as confirming the authenticity of identification

marks. The designer and/or manufacturer of a given piece of jewelry may be identified by

extensive research and the authentication of trademarks, hallmarks, and maker’s marks.

The gemologist appraiser was able to ascertain material, style, size, and quality of

workmanship from his personal examination and referencing photographs and personal

research.

Each work has been measured. All measurements are approximate. Measurements are given

to the nearest mm/gram. Unless otherwise stated, the weights of all mounted gemstones are

estimated by using accepted gemological formulas, and should be within the accepted

limitations of that method. Although state-of-the-art gemological equipment is used, the

actual weight of gemstones when unmounted may be different from the estimated wight by

formula (also considered an extraordinary assumptions and limiting condition).

No condition report was supplied. The appraiser has assigned each piece a general

condition comment - good, fair, or poor - and a qualification. “Condition” refers to what

is considered generally acceptable, with ordinary wear and tear for its type, unless

otherwise noted.


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1

The Gramm-Leach-Bliley Act, passed in 1999 and fully effective in July, 2001, addressed

overall financial industry reforms as well as emerging consumer privacy and security

issues. Officially called the “Financial Modernization Act of 1999”, it affects the

technology and information system policies used by anyone engaged in providing financial

services either directly or indirectly to consumers. Appraisers are specifically named

as institutions required to follow the stipulations of the law.

10


PHOTOGRAPHY: Photographs are taken upon request and necessity. The appraiser took 35mm

photographs of the work. No modifications or alterations were made to the appraisers’

photographs.

M ETHOD OF RESEARCH: Research was conducted in the offices of COMPANY NAME. The office is

equipped with an extensive library of more than 10,000 research books and auction

catalogues. Additional research was conducted on the internet using standard search

engines as well as pricing data bases to which COMPANY NAME subscribes (including ArtNet,

ArtFact, ArtPrice, AskArt, ArtInfo, Gordons, Prices for Antiques, Antique Clocks Price

Guide). Appropriate galleries and auction houses were contacted for information when

necessary. Minimal outside library/museum research was conducted for this specific

appraisal. Specific sources and Internet sites are listed at the end of the report.

TYPE OF APPRAISAL: This report is considered to be a self-contained appraisal report

according to the rules of the 2008-2009 USPAP (Uniform Standard of Professional Appraisal

Practice). Comparable auction history is included in the report when relevant. Specific

comparable retail sales history is confidential according to the Gramm, Leach, Bliley Act1

and cannot be disclosed without the owner’s permission. However, the appraisers have

noted general conversations in the client’s file in the offices of COMPANY NAME and are

available for the client or the Internal Revenue Service (with the client’s permission)

to examine upon request. This information will be kept by COMPANY NAME for a minimal

period of five (5) years after the date of issue or two (2) years after final disposition

of any judicial proceedings involving the appraisers, whichever period expires last.

APPROACH TO VALUE: The appraisers named on the cover page of this document employed the

"market comparison" approach to arrive at the appraised "fair market value". The "income"

approach and the "cost" approach are not applicable to this particular appraisal.

M ARKET EXAM INED: The "market comparison" approach analyzes recent sales of comparable

articles at major international and regional fine art auctions, private and public sales,

shows and exhibitions, as well as prevailing prices at retail shops and galleries where

the article may normally be traded. For this particular appraisal, the appraisers


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11


primarily examined the appropriate international gallery and auction markets. Adjustments

are then made for each article which consider age, condition, rarity, artistic merit,

technical workmanship, current trends and availability of an article as compared to such

recent sales.

TYPE OF VALUE USED: Fair Market Value.

DEFINITION OF VALUE: Appraised “fair market value” as defined by IRS Section 1.170 and

20.2031 (b) is "the price at which the property would change hands between a willing buyer

and a willing seller, neither being under any compulsion to buy or to sell and both having

reasonable knowledge of relevant facts." (According to Technical Advisory Memorandum

9235005 (May 27, 1992), fair market value should include the buyer's premium.) 20.2031

(b) continues "the fair market value of an item of property includible in the decedent's

gross estate is not to be determined by a forced sale price. Nor is the fair market value

of an item of property to be determined by the sale price of that item in a market other

than that in which such item is commonly sold to the public, taking into account the

location of the item wherever appropriate. Thus, in the case of an item of property

includible in the decedent's gross estate, which is generally obtained by the public in

the retail market, the fair market value of such an item of property is the price at which

the item or a comparable item would be sold at retail." (Treasury Regulation Section

1.170A-13©)(3)(1988)

SOURCE FO R VALU E DEFINITION: IRS Section 1.170 and 20.2031 (b) and Treasury Regulation

Section 1.170A-13©(3)(1988)

USPAP COM PLIANCY: The report was written by APPRAISER’s NAME, AAA whose USPAP

certification is valid until May 2009.

This appraisal report follows the guidelines of USPAP in that the report provides all of

the necessary information/analysis to satisfy the “retrospective” report development

requirements as defined in Standard 7 (Personal Property, Development) and the writing

requirements of a Self-contained Appraisal as defined in Standard 8 (Personal Property,

Reporting).

Additionally, the report includes complete and augmented descriptive text from the past

appraisals with revised fair market valuations based on the 2008 market. This is

considered Option 1 under Update Report Requirements in Advisory Opinion 3 (page A-8).

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12

EXPLANATION OF AUTHORSHIP AND ATTRIBUTION

GLOSSARYA George III mahogany linen press

Late 18th century

This heading and date indicate that in the appraisers’ qualified opinion the piece is

essentially of the period. Later restorations and alterations are indicated and

considered in the valuation.

A George III-style mahogany linen press

19th century

The heading and date with the word "style" included indicates that in the appraisers’

qualified opinion the piece is an intentional copy of an earlier design. Later

restorations and alterations are indicated and considered in the valuation.

FURNITURE PERIODS AND STYLES

Dates British Monarch U.K. Period French Period

1649 - 1660 Commonwealth Cromwellian Louis XIV (1643 - 1715)

1660 - 1685 Charles II Restoration

1685 - 1689 James II Restoration

1689 - 1694 William & Mary William & Mary

1694 - 1702 William III William III

1702 - 1714 Anne Queen Anne

1714 - 1727 George I Early Georgian Regence (1715 - 1723)

1727 - 1760 George II Early Georgian Louis XV (1723 - 1774)

1760 - 1811 George III Late Georgian Louis XVI (1774 - 1793)

Directoire (1793 - 1799)

Empire (1799 - 1815)

1812 - 1820 George IV Regency Restauration (1815 - 1830)

1837 - 1901 Victoria Victorian Louis Phillippe

2 Empire (1848 - 1870)nd

3 Republic (1871 - 1940)rd

1901 - 1910 Edward VII Edwardian Art Nouveau (1890 - 1920)

SIGNATURE

When a work is signed/dated/inscribed by the hand of the artist/craftsman, the appraiser

will state "Signed/stamped/incised..." exactly as written by the particular

artist/craftsman in the specific composition. This means that the appraiser believes

the work to be by the "signed" artist/craftsman.


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13

EXPLANATION OF AUTHORSHIP AND ATTRIBUTION(Continued from Page 12)

When a signature/stamp/seal exists on a work, but the work does not appear to be by the

hand of such signed artist, the appraiser will indicate that the work "Bears

signature/stamp of...". This means that the appraiser does not believe the work to be

by the "signed" artist/craftsman.

AUTHORSHIP GLOSSARY

TITLE - If a generally accepted title for the work exists, that title is given. If the

work is untitled or the title is unknown, a descriptive title may be assigned and is

indicated with an asterisk (*).

When provenance is unknown and a search of reliable sources fails to render information

concerning a particular artist or work involved, a value determination is based on

artistic merit and market conditions.

AUTHORSHIP - When a work is unsigned but generally accepted in the scholarly community

to be by a particular artist, that artist's name will be indicated as "Ascribed to...".

This is the highest category of authenticity.

When a question of doubt concerning authorship prevails, the authorship will be

indicated as "Attributed to..." a particular artist or a school.

When a signature exists on a work, but the work does not appear to be by the hand of

such signed artists, the appraiser will indicate that the work "Bears signature of...".

This means that the appraiser does not believe the work to be by the "signed" artist.

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14

EXPLANATION OF SILVER, GOLD, AND JEWELRY

Silver - Only articles which are marked with a sterling standard

(925/1000 or greater), the word sterling, or have been

scientifically proven to be sterling, will be described as sterling

silver. Articles with some other silver standard (Continental -

800/1000 or greater, coin, seven metal), or have proven to be silver

of a certain standard, will be identified accordingly.

Gold - Only articles which are marked 10K, 14K, 18K, 24K, or have

been scientifically proven to be gold, will be described and

identified accordingly as gold.

Jewelry - All articles of fine jewelry with major stones are

examined by a Graduate Gemmologist and will be described and

identified accordingly. Articles of vintage and/or collectible

jewelry are examined by an antique’s appraiser and valued as

antiques rather than their value in materials.

All weights have been determined by use of Troy or pennyweight

scales.

Current spot silver and gold prices on the New York market are a

factor in the determination of appraised value of contemporary

silver. Adjustments are then made for each article after

considering age, condition, rarity, artistic merit, technical

workmanship, current trends, and availability of an article.

Gold items with a fine art, antique, or rare value are indicated in

the report as "(GOLD)". This indication is directly under the

article number.

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15

EXPLANATION OF FINE JEWELRYDEFINITION OF TERMS

DIAMONDS AND COLORED STONESAll articles of fine jewelry with major stones are examined by a Graduate Gemmologist and will

be described and identified accordingly. Articles of vintage and/or collectible jewelry are

examined by an antiques appraiser and valued as antiques rather than their value in materials.

Diamond and colored stones are valued based on the following criteria when significant:

CARATCarat is the measure of weight, not the size of the stone. It is a small unit of measure

equal to 200 milligrams. The word "carat" is derived from “carob”, the tree whose seeds

became the standard for measuring diamonds. A 1 carat diamond is made up of 100 units called

"points". Therefore, a 50 point diamond is a ½ carat or .50 carat. (“Carat” in reference to

the weight of a stone should not be confused with "karat" in reference to gold.)

COLORDiamonds are assigned a color grade based upon the amount of body color exhibited when

compared to a set of Master Color Diamonds which have been color-graded and registered by the

GIA Gem Trade Laboratory. In most cases, diamonds are graded using a standardized light

source equivalent to daylight.

The color grading scale is as follows:

D E F * G H I J * K L M * N O P Q R * S T U V X Y Z * Z+ COLORLESS NEAR FAINT VERY LIGHT YELLOW LIGHT YELLOW FANCY COLORLESS YELLOW YELLOW

CLARITYClarity is an indication of a diamond's purity. Clarity is determined by the overall number,

size, and location of inclusions (flaws). The U.S. Federal Trade Commission established the

jewelry industry's standards for diamond clarity based on 10-power magnification. As such,

the appraiser assigned diamonds a clarity grade based upon examination under a 10x binocular

microscope equipped with dark field illumination.

The clarity grading scale is as follows:

FLAWLES

SI.F. VVS¹¹ VVS² VS¹ VS² SI¹ SI² I¹ I² I³

INTERNALL

Y

FLAWLESS

VERY VERY

SLIGHTLY INCLUDED

VERY SLIGHTLY

INCLUDED

SLIGHTLY

INCLUDED

IMPERFECT EYE VISIBLE

INCLUSIONS

CUTCut refers both to the shape of a diamond and the precise arrangement of its facets. The most

popular cuts are Round (AKA Brilliant), Pear, Marquise, Emerald, Oval, Princess, and Heart.


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16

EXPLANATION OF FINE JEWELRY - DEFINITION OF TERMS(Continued from Page 15)

PEARLSAll articles of fine jewelry with pearls are examined by a Graduate Gemmologist and will be

described and identified accordingly. Articles of vintage and/or collectible jewelry are

examined by an antiques appraiser and valued as antiques rather than their value in materials.

Pearls are valued based on the following criteria when significant:

SHAPERound - well-matched, globular (most valuable)

Half-round - flat bottoms

Baroque - irregular

Fresh water - irregular

BODY COLORThere are six main body colors found in pearls: white, cream, pink, golden, black, and

green. Pearls are also found in blended color variations such as lavender, silver, and gray.

Pearls are ideally graded in natural daylight using a white background. If natural light is

unavailable, fluorescent light is the next best lighting. Color evaluation of pearls is

controversial as a value factor. While color is significant, it is not granted over-

importance in the final estimation of value. The evaluation of color is more difficult and

rather subjective, as there are subtleties of market preference based on attitudes of

specific clients and regional preferences.

LUSTERPearls are rated according to the fineness of their luster. Luster is determined by the

intensity of the reflection found on the surface of a pearl which results from light striking

the surface. Luster is seen on a smooth surface where no ridges are present to reflect the

light in many directions. The more mirrorlike the surface reflection of a pearl, the better

the quality. In evaluating pearls, the appraiser assigned a luster rating of very good,

good, and fair.

MATCHMatch is an indication of continuity and quality in a strand of pearls. In a well-matched

strand, the pearls are similar in shape and give the viewer the overall impression of

evenness. A well-matched strand is given a higher value consideration than one of mixed

shapes. In evaluating a stand of pearls, the appraiser assigned a match rating of very good,

good, and fair.

BLEMISHESBlemishes, or spotting, are the wrinkles, cracks, gaps, bumps, or dull spots on the surface

skin of pearls. The most important criterion for assessing the value of a pearl is the

perfection of the skin, i.e., the lack of blemishes. As such, the appraiser has indicated

any apparent blemishes.

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17

DISCLAIMERS, LIMITING CONDITIONS AND ASSUMPTIONS

This certificate of appraisal is given, subject to the terms and conditions hereinafter

set forth, all of which are a part hereof unless expressly set aside in writing either

on the pages of this certificate or by writing attached to the certificate signed by

all parties concerned.

This appraisal consists of ## pages and must be presented in its entirety to be

valid.

This appraisal is prepared solely for estate tax purposes using the comparative

market approach to arrive at the fair market value as of , . It is to be used

solely by the Estate of MR. ZEN and the agents (executor, accountants, attorneys) for

estate tax purposes. This report can also be relied upon by the Internal Revenue

Service .

The client shall indemnify, defend, and hold us harmless from and against any actions,

claims, liabilities or expenses incurred as a result of claims based on or arising from

the appraisal, by third parties unrelated to the immediate purpose of this appraisal.

Unless otherwise stated herein, this certificate is based only on the readily apparent

identity of the items appraised, and no further opinion nor guarantee of authenticity,

genuineness, attribution, or authorship is made. However, in appraising the subject

articles, the appraisers found no reason to question the authenticity of the articles.

To the appraisers’ knowledge, scientific and/or laboratory testing has not been

performed on any item. When necessary, items were examined under a 10X magnifying

lens.

The appraised value is based on the whole ownership and possessory interest

undiminished by any liens, fractional interests or any other form of encumbrance or

alienation.

This certificate is made at the request of the party named for her use. It is not an

indication or certificate of title ownership. The identification of the interest of

the requesting party is simply that represented to the appraisers by such party and no

inquiry or investigation has been made nor is any opinion given as to the truth of such

representation.

The values expressed herein are based on the appraisers’ best judgment and opinion and

are not representations or warranties that the items will realize that value if offered

for sale at an auction or otherwise. The values expressed are based on current

information on the assigned effective valuation date stated on the cover page of this

report. No opinion is hereby expressed as to any future value, nor unless otherwise

stated, as to any past value. (Continued on Page 18)

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18


The appraisers have considered the highest and best use of the appraised articles with

respect to the most appropriate, common, and legal marketplace given the purpose of the

appraisal.

The appraisers examined the artwork in 19**-200* and periodically (but not completely

and specifically) throughout the past eight (8) years. The wife of the client has

reported the articles to be in similar condition, without further damage or repairs.

The wife of the client reported that the works are in her possession, except as noted.

As such, the updated appraised values reflect comparable existence and condition of the

article per the 1999-2000 and successive appraisal reports. The appraisers are not

responsible for unreported deaccessions or unreported condition issues which may have

occurred since examination.

Other than previous appraisal assignments, do the appraisers have any past interest,

present interest, nor any contemplated future financial interest in the appraised

property. Nor do the appraisers have any personal interest or bias with respect to the

parties involved. This appraisal was done objectively, according to the rules of the

IRS (in the Pension Protection Act of 2006 H.R. 4, Public Law 109-280), and in

accordance with the 2008-2009 Uniform Standards of Professional Appraisal Practice.

Further, the appraisers have no other interest which might tend to prevent making a

fair and unbiased appraisal.

This appraisal was researched and prepared by the appraisers named on the cover page

of this report. Supplemental research was supplied by office assistants and interns

at COMPANY NAME, particularly Jacklyn Smith, Farah Fawcett, and Kate Jackson. No other

person supplied significant assistance in preparation of this report.

A significant amount of client’s information was provided to the appraisers by the

client or specific dealers. However, information regarding provenance on some articles

was limited to hearsay. Any factual and/or hearsay information provided by the client

is assumed to be correct, however, the appraisers are not responsible for any errors

or misrepresentations on the part of the client.

The appraisers did not personally examine any of the comparable sales and/or offerings

with regard to these particular works. The appraisers are relying on information made

available through price data bases and gallery inventories regarding authenticity,

condition, and sales information concerning these works.

Consulting sources are listed in the back of the report. Information furnished by

consulting sources is assumed to be reliable, but is not guaranteed by the appraisers

or their firm.


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19


The appraisers are not required to give testimony, be present in any court of law, or

appear before any commission or board by reason of this appraisal, unless prior

arrangements have been made with the appraisers. Should this report be challenged in

any way, not limited to litigation, it is understood that the appraisers are prepared

to defend their appraisal, if required. Courtroom testimony, mediation proceedings,

and the necessary preparation are considered to be separate assignments and will be

billed at our then current normal hourly rate plus expenses as required.

Possession of this report, or copy thereof, does not include the right of publication

without the written consent of the appraisers and their firm. This report in its

entirety, or any part thereof, including the identity of the appraisers or their firm,

shall not be made public through advertising, public relations, news releases, sales,

or other distributive or information media without the written consent of the

appraisers and their firm.

Copies of this appraisal and notes pertaining to the appraisal, written and electronic,

will be kept in the offices of COMPANY NAME for a minimal period of five (5) years

after the date of issue or two (2) years after final disposition of any judicial

proceedings involving the appraisers, whichever period expires last. COMPANY NAME will

make every effort to store clients’ records in a safe and secure environment. However,

the firm is not responsible for acts of war, terrorism, or other such unexpected

catastrophes which may affect the safekeeping of this report.

All matters treating the duties, responsibilities, and liabilities of the appraisers

are in accord with the Valuation Standards and Professional Practices as outlined by

the Appraisal Foundation in the 2008-2009 Uniform Standards of Professional Appraisal

Practice and the Principles of Practice and the Code of Ethics of the Appraisers

Association of America.

© 2009 COMPANY NAME. All Rights Reserved. None of the contents of this appraisal report may be reproduced, stored in a retrieval system ortransmitted in any form or by any mean (electronic, mechanic, photocopying, recording or otherwise) without the prior written permission ofCOMPANY NAME and the appraisers' signature.

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20

MARKET ANALYSIS

Recent published auction sales and available retail sales are listed/discussed in

the report following the description of each appraised article of significant value

(primarily those with an FMV in access of $1,000). These listings serve to

substantiate the final appraised value as well as indicate market preferences and

levels. Comparables normally include items that sold prior to the date of the

decedent's death (02/02/08). However, in certain cases, a more appropriate

comparable appeared on the market after the date of death. In which cases, we have

listed those comparables, but have considered the time factor and if the market had

changed since the date of death.

Given that the art markets are always volatile markets, an overall market valuation

forecast cannot be established. Particularly with the uncertain political and

economic situation of the world after September 11, 2001, a market analysis is

difficult to prepare in these unstable times.

Many factors enter into valuations of fine art beyond pure aesthetic appeal. Among

the principles which may affect future values of items are the basic economic

principles of supply and demand, national and international legislation, the global

monetary market, social attitudes, and design trends. However, based on an analysis

of the market since 2000 and an optimistic presumption of a future relatively stable

growth, it could be concluded that certain areas have and will appreciate at a

greater rate than others.

The past few seasons have been very successful for the art market with both

Christie’s and Sotheby's turning out record-breaking sales. Recognized masters

continue to perform well at auction, paralleling their retail gallery sales. Works

by secondary artists have also proven to command a considerable price at auction,

however, their retail gallery sales are considerably higher than their auction

equivalents. However, as works of the first tier artists become increasingly

difficult to find, renewed interest in the secondary artists occurs, resulting in

a rise in their prices. Some of your works by the second tier artists may

significantly take off in the years ahead.

Since Georgian furniture has a classic look that suits most interiors, it is fairly

stable, but the lower end of the market is experiencing a dip in the market as the

Modernist look is the rage of decorators. Although Georgian furniture is readily

available on the American as well as the European market, fresh quality examples are

often difficult to find. Due to the overactive antiques market combined with

extreme global wealth, a significant rise in the top end of the market has been

observed. Prices for the best pieces continue to rise. Collectors continue to pay

top dollars and outbid each other for exquisite examples of quality Georgian style

and workmanship when such pieces are found. Much of your English furniture pieces

fall into this category. (Continued on Page 21)

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21

MARKET ANALYSIS(Continued from Page 20)

French and Continental furniture are currently performing surprisingly better than

English furniture as collectors are looking for a unique look.

Your rug collection includes some exquisite examples of desirable age and color.

The antique and semi-antique rug market is doing phenomenally well. However, the

rug marker for newer rugs, in general, is not among the stronger markets at the

moment.

Chinese antiquities is one of the markets that has skyrocketed. Changes in the

Asian economy have created a new pool of buyers. Many of them purchasing historical

works and building new cultural collections. Significant works as well as 20th

century tourist works have seen a rise in prices.

That said, with the national economy experiencing a downturn, the art market is

considered fair game. The Fall sales will be indicators of the next few years.

Please note that this appraiser does not guarantee any prices or predictions for

values in the future.

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22

TOTAL VALUE

SILVER $ 0.00

CONTENTS $ 0.00

JEWELRY $ 0.00

GRAND TOTAL $ 0.00

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23

APPRAISED SILVER

Article

Number

Appraised

Value

Description

1. $ 000.00

Piece

An American sterling silver water pitcher of urn form with a

spurred C-shaped handle, raised on a spreading circular base

Pattern 182

Gorham Manufacturing Company, Providence, Rhode Island

1956

Height: 8 7/8 inches

Weight: 23 ounces

Condition: Good.

Photo 10

2. $ 000.00

Piece

An English Regency sterling silver water pitcher of urn form

with an engraved armorial indicating Resurgo above a reeded

lower section continuing to a spreading circular pedestal base,

mounted with a spurred wood handle

Maker HI

London, 1813

Height: 12 inches

Weight: 43 ounces

Provenance: C. M. Leonard Antiques, New York

Sale - March 3, 199-

Condition: Good.


05/22/08 – Sotheby’s, NY, lot 152, Regency water pitcher, H:

11.5 Wt: 35 oz, est. $1,500-2,500; sold $4,055

03/29/08 – Christie’s, NY, lot 12, Regency water pitcher,

H: 13.5 Wt: 45 oz,, est. $2,000-3,000; sold $3,575

02/03/08 – Christie’s, London, lot 215, Regency water pitcher,

H: 12.25 Wt: 42 oz,, est. £2,000-3,000; sold $3,377

Photos 12 and 13

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24

APPRAISED CONTENTS - ENTRY FOYER

Article

Number

Appraised

Value

Description

3. $ 000.00

Piece

Name*

A quiet early autumn landscape depicting trees and bushes sur-

rounding a reflective winding river, with hills in the

background, under a blue sky filled with yellow and pink-tinged

clouds, executed in a painterly manner

Oil on canvas board

Cal E. Broming (American, 20 century)th

Executed 1969

Signed Cal E. Broming [?] and dated 1969 at lower right

Work size: 8 x 9 3/4 inches (sight)


20 century gold-painted wood frame with linen-covered filletth

and giltwood bevel

Condition: Good.

Note: Only one record for artist was found in search of

standard biographical and auction sources which leads appraiser

to question spelling of artist’s name. Should additional

biographical information be made available, this value should

be reviewed.

Photos 156 and 157

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APPRAISED CONTENTS - ENTRY FOYER

25

4. $ 000.00

Piece

Name

An early autumn landscape showing a tall tree with shorter

yellow-leafed trees and bushes of purple wildflowers at base

with other orange-leafed trees on distant hill at right and in

left valley, under a blue sky filled with cumulus clouds

Oil on canvas

Walter Whitcomb Thompson (American, 1882 - 1948)

Executed January 25, 1927

Signed Walter W. Thompson at lower right; also titled The

Monarch, signed by Walter W. Thompson, dated 1-25-27, and

indicated N.Y. on reverse

Canvas size: 20 x 24 inches

Framed size: 23 5/8 x 27 3/8 inches

20 century gilded oak frameth

Condition: Good.


06/15/08 – Charlton Hall Galleries, Columbia, SC, lot 624,

Morning Siesta, Murrells Inlet, South Carolina, o/board, 24 x

20, est. $5,000-7,000; sold $4,800

06/17/03 – John Moran, Altadena, CA, lot 157, Sangre de Christo

Range near Salida, 1922, o/canvasboard, 12 x 16, est. $800-

1,200; sold $605

06/04/03 – Alderfer’s, Hatfield, PA, lot 270, Now the Day is

Over, o/c, 20 x 30, est. $1,000-1,200; sold $1,380

Photos 164 and 165

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26

APPRAISED CONTENTS - POWDER ROOM

Article

Number

Appraised

Value

Description

5. $ 000.00

Piece

A Dutch Baroque-style oyster-veneered burl walnut and marquetry

wall mirror, the oblong mirrored plate within a conforming

moulded frame, each corner with inlaid scrolling foliage

Late 19 centuryth

Height: 38 inches Width: 30¼ inches

Provenance: Yale Burge Antiques, Inc., New York

Sale - May 3, 1990 Stock number 504/5856

Via IMA Designs Ltd., New York

Condition: Good; some losses to mirrored plate.


11/01/05 - Sothebys, London, lot 174, Anglo-Dutch oyster-

veneered mixed wood wall mirror, Wm & Mary, Second half 17th

C., 41 x 33, est. £3,000-4,000; sold £9,000 ($16,364)

04/16/02 - Christie’s, NY, lot 244, Anglo-Dutch oyster-veneered

mixed wood wall mirror, Wm & Mary, Late 17 C., 35 x 29, est.th

$8,000-12,000; sold $15,535

Valuation: Although comparables are earlier, they are of the

same style. Value is reduced due to later date.

Photo 191

6. $ 000.00

Piece

A French cut-crystal covered dish of circular shape, the cover

and base cut with starburst design

Massena

Number 733 401

Baccarat, Paris

Late 20 centuryth

Marked underneath Baccarat France

Height: 3 inches

Diameter of bowl: 5 3/4 inches

Condition: Good.

Note: Discontinued.

Photos 188 and 189

SAMPLE REPORT



27

APPRAISED CONTENTS - LIVING ROOM

Article

Number

Appraised

Value

Description

7. $ 000.00

Piece

“Name”

An abstracted depiction of an old man with hump back seated on

a stool and with a young boy clutching his left knee, the man

with a black crow perched on left shoulder and black cat

climbing onto right knee

Oil on canvas

Trento Longaretti (Italian, born 1916)

Executed 1967

Signed T. Longaretti at lower right; also marked 1276/67 Trento

Longaretti, “Nowno Rouenta of Bombino Gietto” 1967 on reverse

Canvas size: 27 3/4 x 19 3/4 inches

Framed size: 35¼ x 27 inches

20 century gilded and painted wood frame with yellow linen-th

covered fillet

Condition: Good.

Auction comparable:

11/09/07 - Dobiaschofsky, Bern, lot 593, Il prestigiatore del

teatro dei poveri, o/c, 39.4 x 31.9, est. $11,819; sold $11,473

Photos 206 and 207

8. $ 000.00

Piece

An American upholstered three (3)-seat sofa with enclosed back

and arms over a tufted seat cushion and straight skirt covered

in yellow strié silk upholstery with yellow and peach tape trim

Late 20 centuryth

Height: 28 3/8 inches Length: 7 feet, 1 inch (85 inches)

Condition: Good.

Valuation: Auction market does not reflect the appropriate FMV.

As such, the appraiser looked to the decorator market and

applied a discount to arrive at the FMV.

Photo 339

SAMPLE REPORT



28

APPRAISED CONTENTS - LIBRARY

Article

Number

Appraised

Value

Description

9. $ 000.00

Piece

Name (Number -2-1)

A marine scene showing a large sailing vessel on rough waters

with a smaller sailing vessel in the distance, clouded white

sky

Oil on board

Montague J. Dawson (British, 1895 - 1973)

Executed September 30, 1960

Signed Montague Dawson at lower center

Work size: 20 x 24 inches

Framed size: 26¼ x 30¼ inches

20th century giltwood frame

Provenance:

Frost and Reed, London Number 4261 Date 30-9-60 (label)

Marine Arts Gallery, Salem, Massachusetts

Sale - January 25, 1988

Condition: Good.

Note: Label on reverse indicates that Dawson was originally

commissioned to paint this work for the --- House. However,

when he completed the work and delivered it to the --- House,

they found the painting to be too small. He later painted a

larger one which currently hangs in the --- House.


11/06/07 – Sotheby’s, London, lot 78, Homeward Bound, o/c, 20.1

x 29.9, est. $61,112-101,853; sold $100,852

01/31/07 – Christie’s, NY, lot 344, The “Arc” and the “Dove” off

the Scilly Isles, o/c, 28 x 42, est. $60,000-80,000; sold

$72,000

Valuation: A premium is added due to the --- House connection.

Photos 352, 353,

354, and 355

SAMPLE REPORT



29

APPRAISED CONTENTS - MR. ZEN’S OFFICE

Article

Number

Appraised

Value

Description

10. $ 000.00

Piece

Name

A realistic landscape study depicting a stream flowing through

a hilly woodlands area, cascading from a tree-covered hill

under broken trees and over rocks

Oil on canvas

Jervis McEntee (American, 1828 - 1891)

Executed July 1855

Initialed JME in monogram and dated 1855 at lower center;

reverse original stretcher also inscribed Lanes and dated July

1855

Canvas size: 14½ x 15 inches

Framed size: 21¼ x 16¼ inches

19 century giltwood frameth

Provenance:

Collection of the family until 1976

Hirschl and Adler, New York Sale - April 10, 198-

Stock number APG 2247h

Condition: Good.

Note: Canvas relined with note stating the canvas was labeled:

Williams, Stevens, and Williams Looking Glass Ware Rooms and

Art Repository Engravings, Art Materials 353 Broadway, New

York.


09/13/08 – Leland Little Auctions, Hillsborough, NC, lot 227,

Forest Interior, 1864, o/c, 14.2 x 17.2, est. $4,000-6,000;

sold $11,000

10/25/07 – Shannon’s, Milford, CT, lot 98, Forest Interior,

1883, o/c, 16.2 x 11, est. $10,000-15,000; unsold

09/12/07 – Christie’s, NY, lot 22, A Grove of Trees, Ashokan,

New York, 1885, 15.5 x 11, est. $6,000-8,000; sold $7,500

Photos 468 and 469

SAMPLE REPORT



30

APPRAISED CONTENTS - DINING ROOM

Article

Number

Appraised

Value

Description

11. $ 000.00

Piece

A mahogany two (2)-pedestal dining table, the rectangular top

with rounded corners inlaid with brass stringing over a pierced

apron, raised on two (2) vasiform pedestals, each with three

(3) brass-inlaid downswept legs, brass lion paw feet

Second half 20 centuryth

Height: 30 1/8 inches Length: 83 3/4 inches

Width: 44 1/8 inches

Condition: Good.




Photos 521, 522, and 523

12. $ 000.00

Part service

A German porcelain partial coffee service, each white piece

decorated with an inverted scalloped cobalt border patterned

with gilt flowers and gilt scrollwork trim and a cluster of

polychromed flowers centered below each arch

Furstenberg Porcelain Manufactory, Furstenberg, Brunswick

20 centuryth

Marked 7

Comprising:

Eight (8) cups

Height of each: 3 inches

Six (6) saucers

Diameter of each: 5 7/8 inches

One (1) two-handled covered sugar bowl of squat bulbous form

One (1) cream pitcher

A total of sixteen (16) pieces

Condition: Good.

Photos 576, 577, and 578

SAMPLE REPORT



31

APPRAISED CONTENTS - KITCHEN AND HALL

Article

Number

Appraised

Value

Description

13. $ 000.00

Piece

Name (Number 259)

A colored botanical print depicting a purple-tinged green

cabbage on a stem, with a slender stem with tiny yellow

blossoms in the background

Engraving printed in colors on paper

Johann Weinmann (German, died 1788)

Executed circa 1737 - 1747

Plate size: 12 3/4 x 8½ inches (plus margins)

Framed size: 24 x 18½ inches

20 century green and black plaid painted wood frame with hand-th

painted French matte and plexiglass plate

Provenance: C. M. Leonard Antiques, New York

Sale - May 21, 1995

Condition: Good.

Note: Images are reported to be the first botanical prints to

be printed in color.


09/30/08 – Bonhams, London, lot 21, A Collection (12 works from

The Phytanthoza Iconographia Series), 1737-1745, color

engraving, 12.8 x 8.5, est. $1,200-1,800; unsold

09/02/08 – Christie’s, S. Kensington, lot 477, Vegetable Studies

from Phythanthoza Inconographia mezzotints, printed in green,

hand prntr, 13 x 8.5, est. $1,189-1,586; sold $1,750

07/11/07 – Christie’s, S. Kensington, lot 1312, Vegetable

Studies group of 8 from Phythanthoza Inconographiam)

mezzotints, 13 x 8, est. $796-1195; sold $2,300

01/20/05 – Christie’s, London, lot 163, Botanical Studies (set

of 12), color etching and mezzotint with handcoloring, 13.2 x

8.8, est. $9,157-14,653; sold $31,460

Photos 626 and 627

SAMPLE REPORT



32

APPRAISED CONTENTS - MASTER BEDROOM

Article

Number

Appraised

Value

Description

14. $ 000.00

Piece

Name

An impressionistic landscape, almost Pointillist in manner,

depicting a meadow of green hues at left, having lush foliage

in right portion of composition, with slightly obscured house,

as seen by rooftop view, at left foreground, having buoyant,

hazy clouds hover about lavender mountainous region in the

background

Oil on canvas

Lilla Cabot Perry (American, 1848 - 1933)

Signed Lilla Cabot Perry at lower right

Work size: 19½ x 29½ inches (sight)

Framed size: 28½ x 39 inches

20 century giltwood frameth

Provenance: Hirschl and Adler, New York Sale - April 10, 1981

Stock number APG 820

Exhibition:

Lilla Cabot Perry A Retrospective Exhibition, The Currier

Gallery of Art, Manchester, New Hampshire; Hirschl and Alder

Galleries, New York; New Jersey State Museum, Trenton, 1969 -

1970, number 12, illustrated

American Paintings from the Late 18 through the Early 20 th th

Century, Wildenstein Art Center, Houston, Texas, 1978, number

35

Condition: Good.


12/20/06 – Christie’s, NY, lot 89, Haystacks, Giverny, o/c, 17.8

x 23.3, est. $3,000-5,000; sold $19,200

03/05/03 – Sotheby’s, NY, lot 69, The Foot Bridge, 1929, o/c,

20.2 x 24, est. $12,000-18,000; sold $14,400

Photos 753 and 754

SAMPLE REPORT



APPRAISED CONTENTS - MASTER BEDROOM

33

15. $ 000.00

Piece

An American upholstered (2)-seat sofa with an arched rectangular

back and rolled armrests, the whole trimmed with cording,

covered in ivory cotton upholstery with fringed skirt

Circa 1977

Provenance: Irving M. Altman, New York

Sale - December 22, 1977

Condition: Good.




Photos 750 and 751

16. $ 000.00

Group

A group of four (4) French crystal fish figurines, each moulded

in a different color and finished with shiny and matte

surfaces, including green, yellow, blue, and purple

Poissons

Lalique, Paris

Late 20 centuryth

Each signed ® Lalique France

Height of each: 1 7/8 inches Length of each: 2 inches

Condition: Good.

Photos 859 and 860

SAMPLE REPORT



34

APPRAISED CONTENTS - SON’S BEDROOM

Article

Number

Appraised

Value

Description

17. $ 000.00

Piece

Woman brushing hair*

A depiction of a nude woman brushing her hair, executed in a

hazy manner with a monochromatic palette

Oil on masonite panel

Stilson (American, 20 century)th

Executed 1969

Signed ©Stilson and dated 1969 at lower right

Work size: 30½ x 24¼ inches


20 century giltwood frame with orange linen-covered matteth

Condition: Good.

Valuation: Decorative value.

Photos 862 and 864

18. $ 000.00

Piece

A cream and pink side table with a rectangular inset top with

canted corners over an open base, fitted with one (1) glass

shelf, the whole decorated with a vinylized and impressed

basketweave design

Third quarter 20 centuryth

Height: 26 inches Width: 26 3/8 inches Depth: 22¼ inches

Condition: Good.

Photo 861

SAMPLE REPORT



APPRAISED CONTENTS - SON’S BEDROOM

35

19. $ 000.00

Piece

NAME

A colored print depicting a standing Native American in colorful

costume holding a rifle and walking on a path between a tree

and a boulder, mountains in the background

Lithograph printed on paper with handcoloring

Originally painted by Charles Bird King (American, 1785 - 1862)

Drawn, printed and colored at J. T. Bowen’s, Philadelphia

Published by Daniel Rice and James G. Clark, Philadelphia, 1843

Work size: 16 3/4 x 11 inches (sight)


20 century carved giltwood frame with French matte andth

plexiglass plate

Provenance: C. M. Leonard Antiques. New York

Sale - April 18, 1995

Condition: Good.

Note: Work is from an original edition of the History of the

Indian Tribes of North America by Thomas L. McKinney, of the

Indian Department, Washington, and James Hall of Cincinnati.

The three volume book was originally published, 1836-1844. It

contained 120 hand-colored lithographed portraits by J. T.

Bowen. The lithographs are based on oil paintings by Charles

Bird King, who was employed by the War Department to paint the

Indian delegations visiting Washington. Most of his original

works were destroyed in a fire at the Smithsonian. Thus their

appearance in McKinney and Hall's Indian Tribes is the only

record of the likenesses of many of the most prominent Native

American leaders of the 19 century. McKinney was the firstth

Director of the Bureau of Indian Affairs, and he provided the

biographies, many based on his personal interviews. Hall, an

Illinois lawyer and journalist, wrote the general history of

the North American Indian.

Valuation: The retail market is the more appropriate market

for Charles Bird King prints. A discount of 30% from the

retail price of this print is applied.

Photos 894 and 895

??

SAMPLE REPORT



36

APPRAISED JEWELRY

Article

Number

Appraised

Value

Description

20. $ 000.00

Piece

An 18 Kt. yellow gold gentlemen’s oyster perpetual day/date

wristwatch having a circular silver dial with stick chapters

surrounded by a fluted bezel, attached to an oyster bracelet

with a smooth and textured surface; automatic movement

Rolex Presidential

Condition: Good.

Valuation: Similar watches sell at Christie’s and Sotheby’s,

New York for $---- to $----.

Photos 57, 58, 59, and 60

??

SAMPLE REPORT



37

SOURCES


_____. American and European auction catalogues, 1987 - 2008.

_____. Annual Guide to Galleries, Museums, Artists. New York: Art in America, 1994 -

2008.

_____. International Hallmarks on Silver. Paris: Tardy, 1985.

_____. The 1950s / Modern Furniture Price Guide: Auction Results from the 1991-1999, vol.

2. Cincinnati, Ohio: Treadway Gallery Inc., 1999.

_____. Uniform Standards of Professional Appraisal Practice and Advisory Opinions. 2008-

2009 Edition. Washington, D.C.: Appraisal Standards Board, 2007.

_____. Woodstock's Art Heritage: The Permanent Collection of the Woodstock Artists

Association. Historical survey by Tom Wolf. Woodstock, New York: Overlook Press, 1987.

Agee, William C, et. al. America Gone Modern From the Twenties to the Sixties. New York:

Spanierman Gallery, LLC, 2000.

Andacht, Sandra. Treasury of Satsuma. Des Moines, Iowa: Wallace-Homestead Book Company,

1981.

Andrews, John. Victorian and Edwardian Furniture Price Guide and Reason for Value.

Suffolk, England: Antique Collectors' Club, 1994.

Andrews, John. British Antique Furniture Price Guide and Reason for Value. Suffolk,

England: Antique Collectors' Club, 1995.

Archibald, E. H. Dictionary of Sea Painters. Second edition. Suffolk, England: Antique

Collectors' Club, 1989.

Aschenbrenner, Erich. Oriental Rugs Persian. Volume 2. London: Antique Collector's

Club, 1996.

SAMPLE REPORT



38

THE FOLLOW ING ARE SOM E OF THE GALLERIES, EXPERTS, AUCTION HOUSES,

AND RETAIL SHOPS W HICH W ERE CONSULTED:

A and J Speelman Ltd., Oriental Art, London

Adobe Gallery, Santa Fe

Altermann Galleries, Sante Fe

Antiquariat Adina Sommer, Munich

Asprey and Garrard, New York

Auffray, New York

Baccarat, New York

Bolland and Marotz, Bremen

Bonham's, Knightsbridge

Briest, Paris

Bruun Rasmussen, Copenhagen

Bukowskis, Stockholm

Butterfield’s and Bonhams, San Francisco

Christie's, New York, Los Angeles, London, South Kensington,

Melbourne, and Amsterdam

Christie’s East, New York

Dalva Brothers, New York

Daphne Rankin, London

Karl Springer, New York

Kennedy Galleries, New York

Ketterer, Munich and Berlin

King Galleries, Scottsdale

Kunsthallen, Copenhagen

Kunsthaus am Museum-Carola van Ham, Cologne

Kunsthaus Lempertz, Brussels

Lalique, New York

Lillian Nassau, New York

MacConnal-Mason Fine Paintings, London

Mallett and Son Antiques Ltd., London

Manhattan Art and Antiques Center, New York

Neumeister Kunstauktionen, Munich

Wood and Hogan, New York

SAMPLE REPORT



39

THE FOLLOW ING ARE SOM E OF THE INTERNET SITES W HICH W ERE CONSULTED:

www.americansportingart.com

www.anri.com

www.arnoldstobacco.com

www.artfact.com

www.artnet.com

www.artprice.com

www.askart.com

www.asprey.com

www.artinfo.com

www.baccarat.com

www.canyonart.com

www.collectmodelcars.com

www.danburymint.com

www.decorati.com

www.ebay.com

www.geocities.com

www.gordonsart.com

www.groveart.com

www.herndonfineart.com

www.mataharicollectibles.com

www.newel.com

www.replacements.com

www.rogallery.com

www.ross-simons.com

www.someonespecial.com

www.steuben.com

www.tiffany.com

www.waterford.com

http://www.americansportingart.com

http://www.Anri.com

http://www.arnoldstobacco.com



http://Www.artprice.com


http://www.asprey.com

http://Www.artinfo.com

http://www.baccarat.com

http://www.canyonart.com

http://www.Collectmodelcars.com

http://Www.danburymint.com

http://www.decorati.com

http://www.ebay.com

http://www.geocities.com


http://www.groveart.com

http://www.herndonfineart.com

http://www.mataharicollectibles.com

http://www.newel.com

http://www.replacements.com

http://www.rogallery.com

http://www.ross

http://Www.someonespecial.com

http://www.steuben.com

http://www.tiffany.com

http://www.waterford.com

Appraisal Writing Guidelines

The appraisal report which you present to your client is the concrete evidence of your academic expertise, your professionalism in the field, your knowledge of the current standards and regulations, and your ability to create a substantive and credible document. The appraisal report is essentially your only work product and remains available for inspection for an unrestricted period of time. The appraisal report may be utilized in a wide variety of contexts, depending on its purpose: an insur-ance schedule; the settlement of a damage/loss claim; a determination of tax liability for the IRS in an estate situation; a determination of tax relief for the IRS in a non-cash charitable contribution; the basis for an equitable distribution; the basis for disposition decisions; the basis for a collateral loan decision to illustrate just a few of the possibilities. The appraisal report is, in addition to a professionally correct document, the primary factor on which your reputation in the field is determined, your best advertisement, a basis for referrals, and a protection from ethical and/or legal complaints. It should be a product in which you can take pride. The appraisal report should allow the reader to follow the appraiser in the valuation process, in a reasonable and logical manner. The document should present, in articulate and precise language: (1) the purpose, terms, approach, and marketplace context in which the value is determined;(2) the extent of examination, by whom, and any special circumstances regarding examination (if any); (3) a full description of the object, appropriate to its value, importance and the purpose, applying the evaluative experience of the appraiser; (4) the data and sources examined, and the analysis which was applied, and the value conclusion. The narrative must be cogently and intelligently written with no loopholes.

According to USPAP, the appraisal document is acceptable when it meets or exceeds (1) the expectations of parties who are regularly intended users for similar assignments; and (2) what an appraiser’s peers’ actions would be in performing the same or a similar assignment. Each valuation process is unique. The appraiser should be satisfied that the report anticipates and answers any questions that may be raised.

I. Elements Required for a Correctly Prepared Appraisal

1. Name and Address of Client(On a rare occasion, a client may prefer to remain anonymous. This is permitted when the appraiser has documented the name and address in the client’s work file)

2. Name, Contact Information and Qualifications of the AppraiserStatement of professional qualifications - curriculum vitae 3. Signed CertificationStatement that the facts contained in the report are true and correctStatement that the reported analysis, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are the appraiser’s personal, impartial, and unbiased professional analyses, opinions, and conclusions Statement of disinterest (or stated interest) on the part of the appraiser (no financial or personal interest regarding the property or the parties involved) Statement of no bias on the part of the appraiser (regarding the property or the parties involved)Statement of fee structure (basis for charge; that it is not contingent upon the value of the objects appraised)Clear division of appraisal when one, or more than one, appraiser is involved, who did what (including inspection) and inclusion of all CV’sStatement of personal physical on-site inspection by the appraiser (or disclosure of other methods/circumstances)Disclosure of all parties providing significant assistance with the report or statement indicating that the appraiser is solely responsible for all information in reportStatement that appraisal is prepared in accordance with USPAP including date of USPAP followedAll relevant signatures

4. Scope of Work (must be clearly and conspicuously noted)Determine, perform, and disclose the Scope of Work in the report and identify:The problem to solveGeneral category of items to appraise (i.e., Fine art, household contents, Modern prints, etc.) The clientThe ownerIntended use of the appraisal (See Purpose of the Appraisal, below)Intended user(s)Type of value (See Type of Valuation Used and Defined, below) Definition of valueSource for definition of value Approach to value (See Approach to Value, Used and Defined, below)Marketplace (See below)Effective date of valuation (See below)Assignment conditions (i.e., adequate time to research; adequate lighting; provenance supplied by client; etc.)The extent to which the property is identified (Title search (Art Loss))The extent to which the property is inspectedSpecify the examination procedure followed(i.e., examined under incandescent light and daylight; used a 10X magnification loupe, etc.)Specify any normal examination procedure that has been excluded (i.e., did not remove from wall, did not examine under a black light, did not examine clock works, etc.)The type and extent of data researchedThe type and extent of analysis applied at the arrived valuationsUSPAP compliancyType of report (See below)Updates

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5. Purpose of the Appraisal (must be clearly and conspicuously noted)InsuranceDonationEstate with a surviving spouseEstate with no surviving spouseTax lossEquitable distributionEstate planningInventoryDamageLossCollateralLiquidationNet worthOther

6. Type of Reports (must be clearly and conspicuously noted)Self-containedSummaryRestricted use

7. Approach to Value Used and Defined (each method must be mentioned and discussed as to its applicability in this particular appraisal situation)Market Data Comparison ApproachCost ApproachIncome Approach

8. Type of Valuation Used and DefinedRetail Replacement CostRetail valueFair Market ValueMarket ValueMarketable Cash ValueLiquidation valueSalvage valueReplacement Cost New

9. Marketplace in Which Valuation is Applied (location and type)Auction (high end, mid range, etc.)RetailWholesaleThrift shops; consignment storesGeographic location

10. Relevant Dates (note whether current, prospective, or retrospective)Date of on-site inspection Effective/valuation date of the appraisal (assigned or specific)Date appraisal report issuedOther dates as applicable:date of deathdate of donationdate of separationdates of researchrevised date

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11. Description of Appraised ObjectsItemQuantity (if pair, set, etc.)Country/region of originMediumDate(s)/period of creationMarkings (e.g. signatures, maker’s marks, manufacturer’s marks, inscriptions) Full detailed description (including all observable physical characteristics) Dimensions (measurements appropriate to the object i.e., an appraiser would weigh a piece of silver, but not a painting)Condition (a representation as to condition must always be included and qualified, whether per object or per group, not as a general statement for the entire report)Frame description and conditionStatement of value as appropriate to the purpose of the appraisal (can be a firm statement, or a range of values, or a statement as to greater than or less than)

12. Disclaimers, Extraordinary Assumptions, Assumptions, LimitationsStatement in belief of authenticity (only that the objects appraised correspond to the descriptions provided in the appraisal); but that the appraisal is NOT a certificate of authenticityStatement of the number of pages in the appraisal

13. For Appraisals Relating to IRS Usage (Estate (E) or Donation (D))Statement that appraiser has not been disqualified by the IRS (E and D) Statement that the appraiser acknowledges that the appraisal will be used in connection with a tax return or claim for a tax refund and that a substantial or gross valuation misstatement resulting from the appraisal may subject the appraiser to a civil penalty (D)Appraiser’s Tax ID# (E and D)Statement of the appraiser’s qualifications specific to the item(s) appraised (D) Statement of how the objects were acquired and prices paid (if known) (D)Completion of IRS form 8283 (D - separate from report)

14. Additional Description (if applicable)Name of artist/craftspersonName of historical style/school of workTitle of workProvenanceCatalogue raisonné number or other referenceFrame informationExhibition historyPublication historyOther notes (importance of work, one of a pair, etc.)

15. Support for Valuation ConclusionsState of the market discussion/market analysisMaterial provided by consultants (identified)

16. Support for Valuation Conclusions (if applicable)Comparables (fully presented and annotated as appropriate)Biography of the artist/craftsperson/schoolRelated analysis and discussion of the object/artist/school, etc.

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17. General FormatHeader/footers on each page should include all relevant informationAppraiser’s name and contact informationClient’s nameType of reportPurpose of the appraisalValuation system usedEffective date of valuationPagination indicated on each page (e.g., ‘1/50’ or ‘page 1 of 50’)Statement of the number of photographs (If possible, the numbers should correspond to the item number; if the photos are under separate cover, state the page number where the photo is located (e.g. Item #4, Photo page 1/50).

II. Additional Review InformationThe structure of the report should be as “user friendly” as possible, logical and sequential in the presentation of the valuation conclusions and precise in the value statements. The items should be numbered, keyed to the photographs (if included) and organized by both location and/or category, as appropriate. Check that all the Elements of a Correctly Prepared Appraisal have been incorporated within the report and that the appraiser’s credentials are included with every report. According to the 2006 USPAP, the work file for each appraisal must contain the name of the client and the identity, by name or type, of any other intended users; true copies of any written reports, documented on any type of media; summaries of any oral reports or testimonies; and all other data, information and documentation necessary to support the appraiser’s opinions and conclusions, and to show compliance with the Standards. The appraiser must retain the entire work file for at least five (5) years after prepara-tion or at least two (2) years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last. As quoted from the 2006 USPAP, the content of an appraisal report (self-contained or summary) must be consistent with the intended use of the appraisal and, at a minimum, include (describe or summarize) information sufficient to identify the property involved in the appraisal including the physical and economic property characteristics relevant to the assignment and describe (or summarize) sufficient information to disclose to the client and any intended users the scope of work used to develop the appraisal. The appraiser has the burden of proof to support the scope of work decision and the level of information included in a report.

III. Comparables: Purpose and StructureIt is NECESSARY to include comparables in the following reports, both of which must follow IRS guidelines:Appraisals for estate purposes, for any object valued at $5,000 or more, for one which such documentation would be useful, or for one where the valuation is unusual to the general marketplace. (Note: The higher the value, the more detail is required in a comparable analysis.) Appraisals for non-cash charitable contributions (donation purposes.)

It may be USEFUL to include comparables in the following situations:For any appraisal purpose, if, in the appraiser’s judgment, the value of the object requires annotation and support. Providing additional data may be determined by provenance, condition, regionalism, academic interest, or even the expectations of the client.For any appraisal purpose, if the value cited is substantially different from what a knowledgeable person would anticipate, and thus requires explanation. When the expectation seems that appraisal will be litigated.

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Comparables based on auction sales must include:An indication as to whether the buyer’s premium has been included; or the price given is the hammer price. N.B. The IRS considers the buyer’s premium to be an integral part of the fair market value (1992 TAM Ruling).All relevant information (as appropriate) including date of sale, auction house and location, sale number, sale name if a single owner or important collection, lot number, description of item [title, medium, size, signature, etc.], condition if noted, estimates, and sale result [price realized, bought in, withdrawn, or sold subsequent to the auction by private treaty.] Comparables based on private sales must include:The name and location of the dealer, gallery, show; some annotation as to the dealer’s role in the marketplace; and, if possible, the buyer [private collector, museum, etc.; however it would be highly improper for a dealer to disclose the name of a private buyer (Gramm, Leach, Bliley Act of 1999).] The dollar amount of a sale actually realized. If the only values obtainable are those at which similar/same pieces were offered, they may be indicated, if so described. It must then be mentioned that the marketplace was, apparently, resistant at those prices.

All comparables cited should be as recent as possible, and as close to the subject piece in time, form, style, medium, quality, condition as possible. All appropriate sales should be cited and then annotated to explain differences, and the reasoning to support the appraiser’s valuation conclusions. The process by which the appraiser gathered data, what data was available and considered for the appraiser’s analysis, and what factors were relevant to the evaluation should all be readily apparent to the reader.

IV. Review of the Basic Appraisal Report FormatThe appraisal report should be a formal, organized document. The appraiser must remember that, although each assignment is unique, there are essential components that must always be included, as per the “Elements of a Correctly Prepared Appraisal.” In addition, there are other structural and informative sections that should/must be included for specific types of appraisals. Cover Page Table of Contents Valuation Summary Certification PageScope of WorkMarket AnalysisDisclaimers & Limiting Conditions PageInventory/Narrative SectionSources of Data Appraiser’s Credentials ComparablesArtist/Craftsperson biography Discussions of a specific object/artist, etc. Selected BibliographyGlossaryIndex of Artists Consultants’ Credentials Photographs/Photocopies

The technical and aesthetic presentation of the report should be attractive and professionally presented in a form that will withstand mailing and handling. Neither USPAP, the IRS, or the AAA dictate form, format, or style of appraisal report writing, although each have specific elements and requirements to include in a properly prepared appraisal report. Develop your own templates and narrative style. Refrain from using forms or mass-produced boilerplates. The appraiser’s authority is evidenced by the language, cogent organization, and sequential development of the report. © Appraisers Association of America, Inc., 2007

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Elements that must be in every report

(not necessarily in this order)

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APPRAISAL TERMS AND DEFINITIONS ACTUAL CASH VALUE (ACV):

This term refers to Market Value and is generally synonymous with payment restricted to cash. Some insurance

policies also define ACV as the replacement cost minus any depreciation.

ADMINISTRATOR:

This is someone appointed by the court if the decedent died without a will. If no executor is named in the will or

if the person named cannot or will not serve.

AFFIDAVIT:

An affidavit is a statement used in an appraisal which explains what was done in the appraisal. An affidavit is

frequently called the appraiser’s certification.

ALTERNATE VALUATION DATE:

A term most frequently identified with estate appraisals. At present it is the date six months to the day after

the date of death on which the fiduciaries of the estate can chose, legally, to have the estate valued rather

than the date of death. In this manner, the IRS allows the estate the choice of a date which may be more

advantageous in the event that the market or price for the objects in question has changed significantly,

usually declining in value materially, from the date of death to the date six months after the death. If the

alternate date of death is chosen, then all items in the estate must be value on that alternate date, not just the

personal property.

ANTIQUE:

As defined by the United States Customs Department, any object that is 100 years old or older is an antique.

But the term is broadly interpreted with its definition varying from product to product and year to year.

Generally speaking, the following are the most accepted definitions: 1.) An item collected or desirable due to

its rarity, condition, utility or some other unique feature that is older than 100 years. Motor vehicles, in

contrast, are considered antiques in the US if they are older than 25 years and some electronic gadgets of

more recent vintage may be considered antiques; 2.) Ancient art such as sculptures, gems, medals, seals

collected from Greek and Roman civilizations.

APPOSITE VALUE:

This is a value that is fitting, suitable and appropriate for an object.

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APPRAISAL:

As defined by the Appraisal Standards Board (ASB) in the Uniform Standards of Professional Appraisal Practice

(USPAP) is “the act or process of developing an opinion of value.” According to the ASB, value can “be

numerically expressed as a specific amount, as a range of numbers, or as a relationship (e.g., not more than,

not less than) to a previous value opinion or numerical benchmark (e.g., assessed value, collateral value).” It

should be noted that USPAP states that calling an appraisal something else such as “valuation” or “valuation

estimate” does not remove it from being considered as an appraisal if an opinion of value is given. The

document contains a valuation executed for a specific purpose and follows specified guidelines.

THE APPRAISAL FOUNDATION:

This is an independent organization established in 1987 by the US government with members from various

appraisal organizations. The Foundation now receives federal funds and is empowered by Congress to

establish standards for all aspects of the appraisal profession.

APPRAISAL REPORT:

This is the actual document in which the opinion of value is stated. Appraisal reports can be written, which is

always preferable, or oral. Both, according to USPAP, are subject to specific development and reporting

requirements.

APPRAISAL METHODOLOGY:

This is the procedures and rules for executing properly prepared appraisal reports.

ARBITRATION:

This is a way to settle a dispute. Arbitration is a proceeding in which a dispute is submitted to one or more

impartial parties for a binding determination made by the arbitrator. Arbitration is usually quicker, simpler and

cheaper than litigation but the perceived disadvantage is that there is no appeal. With a few narrow

exceptions, like fraud, there is no way to appeal an arbitrator’s decision.

APPRAISER:

This is the individual who values the items and prepares the appraisal document.

APPRECIATION IN VALUE:

This is an increase in value over time.

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ART ADVISORY PANEL:

The IRS Art Advisory Panel is composed of several generic groups of professionals: IRS staff appraisers,

museum directors and curators, art and antiques dealers, and auction house employees. The full panel

generally meets twice a year, while the IRS staff appraisers work full time reviewing appraisals that are

submitted to the IRS and preparing those appraisals deemed appropriate for submission to the whole panel.

The IRS appraisers are full time government employees while the other members of the panel serve two year

terms. Generally speaking, the Panel reviews objects valued individually above $20,000. However, the Panel

has been known to review as well objects valued considerably under that amount.

ASSEMBLED, ASSOCIATED OR MARRIED PIECES:

This term is used to describe a piece of furniture or other piece of decorative arts which has been composed of

parts from various pieces of furniture or woods from the same or other periods, e.g., a dressing table or lowboy

with a chest added to the top to make it into a tall chest or highboy; a refectory table with a 17th century base

and an 18th century top from another table. This is beyond a mere restoration and is almost an attempt at

deception unless the marriage is clearly identified as such when sold.

ASSUMPTIONS AND LIMITING CONDITONS OF THE APPRAISAL:

This is a listing in the appraisal document of those elements detailing the parameters of the appraisal

document, the responsibilities of the appraiser and the information and procedures for which the appraiser

does not assume responsibility. It is generally appropriate for the appraiser to explain why he/she has chosen

to exclude specific elements as part of the description of limiting conditions. According to USPAP, the appraiser

is required to identify and explain the circumstances and appropriateness of any assumptions, extraordinary

assumptions, hypothetical and limiting condition that have been used in an appraisal assignment.

AUCTION REPLACEMENT VALUE (ARV):

This term, usually for insurance purposes, is defined as a reasonable amount in terms of US dollars which

would be required to replace a property with another of similar age, quality, origin, appearance, provenance

and condition within a reasonable length of time in an appropriate and relevant auction market. Since the

client regularly and routinely buys at auctions, the appraiser rarely examines the retail market for this

valuation. When applicable, sales and or import tax, commissions and or premiums are included in this

amount.

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AUTHENTIC:

This term is used to describe pieces of furniture, decorative arts or fine arts which are of the period, right and

have no restorations or alterations.

BLANKET POLICY:

This term is used by insurance companies when articles of personal property are grouped together and given a

total value. A blanket policy may be based upon an appraisal or it may be a value the insured requested.

Typically a blanket policy is subject to limitations in values and carries a higher premium than one where items

are scheduled individually.

BLOCKAGE DISCOUNT:

This principle is applied to the valuation of large groups of similar and like items which, if sold during a limited

period of time, would result in a depression of the prices one might expect if the items were sold separately in

an ordinary market cycle. Consequently, blockage discount is narrowly defined as the percentage the appraiser

would apply to reduce the total valuation to compensate for this situation. Blockage discounts are normally

applied to estate valuations, especially in the case of artists’ estates where large inventories of the art works of

single artists must be valued. However, all appraisers should consider the applicability of blockage discounts

when valuing large groups of similar and like items. Blockage is a discount or reduction in value necessary to

allow a large group of similar objects to be absorbed by the market or sold at a specific date of valuation.

Sometimes it may be necessary to offer an economic inducement in the form of a reduced price to stimulate

the potential buyers in a given marketplace to purchase all the objects being offered for sale at one time. For

example, one may have to offer two for the price of one, four for the price of one, one hundred for the price of

one or whatever it may take to sell all the works. The term blockage discount comes from the world of finance

where shares in publicly traded companies are frequently offered at discounted prices when the volume of the

offering is too large for the market to absorb it at the full, undiscounted, price.

BURNT:

When an item is presented at auction and fails to sell, it is said to be burnt.

BUYER’S PREMIUM:

This is the percentage of the bid or “hammer” price paid by the buyer to the auction when purchasing an item.

The fee ranges between 5 and 25%. See also Seller’s Premium and Hammer Price.

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BUY IN (BI):

This occurs at auction when an object does not meet its reserve price and fails to sell.

CAPITAL GAINS TAX:

This tax is assessed on profits realized from the sale of a capital asset such as stock, bonds or personal

property.

CATALOGUE RAISONNE:

This is a scholarly catalogue which should include all the known works or all the known works in a specific

medium by the artist at the time of compilation of the book. Essential information identifying the works are

included making this the definitive reference book.

CAVEAT EMPTOR:

“Let the buyer beware.” This term means that the seller is not held responsible for the quality or authenticity of

the goods being sold.

CERTIFICATE OF AUTHENTICATION/AUTHENTICITY:

This is an official document which certifies that the piece in question is right and of the period and by the artist

designated. Some states including New York require specific information be included on a Certificate of

Authentication.

CERTIFIED APPRAISAL:

This is the document prepared by a certified member of an appraisal organization.

CERTIFIED APPRAISER:

One who is awarded this designation by a testing and self-regulating appraisal organization. For the AAA, the

appraiser is to pass the certification examination in appraisal theory and methodology and the test in an area

of specialization.

CIRCA:

“About” in reference to age; e.g. circa 1920 when describing the age of an object means that it was made

around that time period give or take 10 years.

CLEAR TITLE:

Good ownership one free from encumbrance, obstruction, burden or limitation

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COLLECTIBLE:

This term usually describes any item that has been mass produced and usually machine manufactured. Today

collectibles are typically manufactured items designed specifically for people to collect such as sports’ cards

and beanie babies.

COMPARABLES:

Finding similar and like objects to the one being appraised is the most commonly applied approach to

evaluation. An examination and analysis of the sales figures for similar works or comparable objects allows

the appraiser to arrive at the appropriate appraised value for the one under consideration. These figures are

mandatory for most donation appraisals and may be provided by the appraiser in other situations when the

appraiser judges them to be necessary.

CONSERVATION:

This is the treatment and preventative care of an object so that its condition does not deteriorate and the

object can remain stable. This is the preservation of a work of art involving careful maintenance and protection

of the item using materials and procedures which will have no adverse affects on the piece. See PRESRVATION

and RESTORATION also.

CONSULTING EXPERT:

This person is an appraiser who provides technical expertise and background knowledge to the attorney and

client in a litigious situation. Such expertise may be related to the quality of the object, the value of the object

or the methodology of the opposing appraiser. The work of the consulting expert is considered privileged and is

not discoverable in court because it falls under the Attorney Work Product Privilege.

COURT CASES:

When the taxpayer has been unable to negotiate a compromise with the IRS the taxpayer may chose to litigate.

Taxpayer suits against the IRS have the right to be pursued in all parts of the judiciary system. They can be

appealed up to the Supreme Court. While the decisions reached in these cases are specific to the individual

cases, they may cause the IRS to modify its procedures and requirements. All appraisers would be well

advised to study the relevant cases carefully since the decisions reached may cause the appraiser to modify

the way IRS appraisals are formulated and appraisal reports are written. Court cases are also sometimes

involved with divorce, insurance or damage and loss of value appraisals when the parties cannot agree on

valuation or any other matters under discussion.

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COVER LETTER:

A cover letter is a letter accompanying the appraisal which does NOT include the value of the appraised items.

CRAQUELURE:

This is the result of the uneven movements of canvas caused by the natural shrinking of the medium during

the aging process. Craquelure usually appears on the surface in a spider web like series of cracks. The surface

can be stabilized by relining the canvas and restoring the cracks.

CRAZING:

This is the fine and random cracking extending only through the surface of pottery, porcelain, stone or

concrete. The cracking can appear along or perpendicular to the length in polygonal shapes or as random

spider webs. Crazing is due to differential contraction between the surface and interior sections often due to

changes in temperature. Crazing has no structural or durability significance and does not by itself constitute a

cause for rejections. It can, however, mark the beginnings of disintegration. All ceramic and concrete products

and many natural stones under varying conditions of moisture and temperature are frequently subject to

crazing. In some Asian potteries and porcelains crazing is produced in a foreseen, admired and regulated

manner.

CULTURAL PATRIMONY:

These are objects involved in the Holocaust, items from past and present wars which were pillaged or removed

from their homeland or owners and those objects taken and robbed from underdeveloped and poor countries.

Today there is an effort to prevent the continuous exploitation and exporting of these treasures.

DEPRECIATION IN VALUE:

This is a decrease in value over time.

DIMS:

This is an abbreviation for dimensions.

DISCLAIMER:

The disclaimer is an explanation of facts either contained in the appraisal for which the appraiser does or does

not “disclaim” or deny responsibility. This is a listing of elements for which the appraiser does not accept

responsibility.

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DISCLOSURE/FULL DISCLOSURE:

Disclosure is the passing of information that is secret, not previously known (i.e., revelation) or which is

believed not to have been known previously. In an appraisal situation, this would include disclosing

confidential information shared by the client with the appraiser.

Full Disclosure, on the other hand, refers to the appraiser’s obligation to state all the work that was done or not

done in generating the appraisal report or any other factors which may, at a later date, alter the valuation

conclusion in the report.

DROIT MORAL:

French term for giving the authority to authenticate works of art, literally “moral right.”

DUE DILIGENCE:

A measure of prudence or activity that is properly expected from and ordinarily exercised by a reasonable and

prudent person under the particular circumstances; not an absolute standard but dependent on the relative

facts of the particular situation. In an appraisal situation, this refers to the amount of work one would expect

an appraiser to perform in order to arrive at a credible conclusion.

ESCHEAT:

This is the common law doctrine that operates to ensure that property is not left in limbo and ownerless upon

the death of the owner. It can be the forfeiture of all property including bank accounts to the state treasury if it

appears certain that there are no heirs, descendants or named beneficiaries to take the property upon the

death of the last known owner.

EQUITABLE DISTRIBTUION:

This term is generally used in a divorce situation or in the dissolution of a domestic partnership and is a fair

division of assets between two or more people. It is the process through which the assets of the partners or

family members are divided in a manner which is equitable based on several factors including the appraised

values of the objects in question.

EXECUTOR OR EXECUTRIX:

This is the person named in a decedent’s will to administer the estate and distribute the properties as the

decedent directed and in an equitable manner.

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FA (FINE ARTS):

This is the acronym for Fine Arts and may be required by insurance companies to designate those objects on

an insurance appraisal which include decorative art and antique objects such as furniture, metals, textiles,

drawings, paintings, prints and sculpture as opposed to Fine Arts Breakable (FAB) or Sterling Silver (SS).

FAB (FINE ARTS BREAKABLE):

This is the acronym for Fine Arts Breakable objects and may be required by insurance companies to designate

those objects on an insurance appraisal such as glass, porcelain, marble and mirrors as opposed to Fine Arts

(FA) or Sterling Silver (SS) objects which may be subject to a higher insurance premium.

FAIR MARKET VALUE (FMV):

FMV is usually for IRS purposes and is defined by IRS Section 1.170 and 20.2031 (b) as “the price at which

the property would change hands between a willing buyer and a willing seller, neither being under any

compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” According to Technical

Advisory Memorandum 9235005 (May 27, 1992), fair market value should include the buyer’s premium. IRS

Section 20.2031 (b) continues “the fair market value of an item of property includible in the decedents’ gross

estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be

determined by the sale price of that item in a market other than that in which such item is commonly

appropriate. Thus, in the case of an item of property includible in the decedent’s gross estate which is

generally obtained by the public in the retail market, the fair market value of such an item of property is the

price at which the item or a comparable item would be sold at retail.” (Treasury Regulation Section 1.170A –

13) (3) (1988) it should be noted that the IRS has changed the definition slightly in various sections of the

Revenue Code and other printed literature. In addition, Pamphlet 561 has also added the following to the

definition: “If you put a restriction on the use of property you donate, the FMV must reflect that restriction.”

FAKE:

This is an object that has been made to deceive and is sold as something that it is not.

FINE ARTS INSURANCE POLICY:

An insurance policy which covers the fine arts contents of a home. Fine arts are generally defined broadly and

can include not only two-dimensional art and sculpture but also decorative arts, furniture and collectibles.

These policies may require individual scheduling of items or a blanket policy to cover all the items. Fine arts

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insurance policies generally vary from insurance carrier to carrier; one would be well advised to examine each

policy closely.

FEDERAL TAX REGULATIONS:

These regulations are published by the Department of Treasury which has oversight authority over the Internal

Revenue Service. The regulations are published from time to time to explain the tax law in the Internal

Revenue Code. It offers explanation and examples illustrative of the principles stated in the revenue code.

FORCED LIQUIDATION VALUE (FLV):

This is the lowest range “NET” value, usually for a quick and forced sale purpose. It is defined as “the most

probable price in terms of cash, or other precisely revealed terms, for which the property would change hands

if sold immediately, without regard to the relevant market place.

FORGERY:

This is a copy executed by someone other than the original artist with the intent to present the object as the

original. This is the generic term for both fakes and frauds.

FOXING:

Brown spots caused by acid on paper or textiles.

FRAUD:

This is a work of art which has been altered, misattributed or otherwise disguised or misrepresented to be what

it is not.

FRENCH GRID SYSTEM:

The name given to a system by which an object is divided into quadrants such as square inches or centimeters

and a value is assigned to an individual quadrant. Presumably the value of the whole can then be determined

by multiplying the number of quadrants by the value assigned to one unit. Appraisers of personal property are

discouraged from using this methodology unless a clear and compelling rationale for its use can be

established.

GOOD FAITH EXCLUSION:

This is an IRS term. Under the law governing donation appraisals, an appraiser who writes an appraisal which

is 150% above which the IRS determines as appropriate can be subject to sanctions. However, if the Director

of Practice determines that the appraisal report in question was written in good faith, the Director has the right

to exclude the appraiser from the specified sanctions.

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HAMMER PRICE:

This is the actual bid price at auction as the hammer falls and does not include the buyer’s premium. See also

Buyer’s Premium and Seller’s Premium.

HIGHEST AND BEST USE:

The term is commonly used in real estate property appraising (See Sacramento Southern Railroad Company vs.

Heilbron, 156 Cal 408) and has been carried over by some into the realm of personal property. Basically the

term means that, when feasibly possible, one should evaluate personal property in the most appropriate

marketplace where it will bring the highest price. The term typically is defined as the examination of the use of

the property, which will result in its highest value. In an appraisal this cannot be merely theoretical but must be

realistic in that the use must be legal, physically achievable and financially feasible. Oftentimes personal

property appraisers refer to highest and best use as the highest attainable price for an object. Many personal

property appraisers have trouble with this definition and object to the carry over from real property. While the

concept of use may be appropriate for depreciable personal property such as machinery and equipment, it has

questionable relevance in the world of appreciable personal property such as art, antiques and collectibles.

While some appreciable personal property can be “used,” the motivation of the majority of collectors is not

structured by the object’s functional purpose but rather its aesthetic appeal. With this in mind, it has been

argued that one does not begin to apply a term which is relevant to exceptions but rather terms applicable to

the majority of situations are more appropriate. It has been suggested that the term “highest attainable price”

may be the better term for appreciable personal property.

HYPOTHETICAL APPRAISALS:

This is the type of appraisal done when the item is no longer in the possession of the owner because of a fire,

flood or other loss. When the appraiser cannot examine the object or is only given photographs of the non-

existent object that the appraiser states that the appraisal is hypothetical or written on the basis of the

information supplied usually by the client. The appraiser’s report is based upon a supposed situation or group

of assumptions.

HYPOTHETICAL CONDITIONS:

According to USPAP, the definition of a hypothetical condition is that which is contrary to what exists but is

supposed for the purpose of analysis. Hypothetical conditions assume conditions contrary to known facts

about physical, legal or economic characteristics of the subject property or about conditions external to the

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property such as market conditions or trends or about the integrity of data used in an analysis. Appraisals of

damaged objects or appraisals done from a photograph used hypothetical conditions. A hypothetical condition

may be used in an assignment only if 1) the use of the hypothetical condition is clearly required for legal

purposes, for purposes of reasonable analysis or for purposes of comparison; 2) the use of the hypothetical

condition results in a credible analysis and 3) the appraiser complies with the disclosure requirements set

forth in USPAP for hypothetical conditions.

IMPAIRED FAIR MARKET VALUE:

Putting a restriction on the use of the property being donated implies that the fair market value is restricted

and reduced.

IN THE STYLE OF:

Means that an item is not of the period in which it was supposed to have been made but rather was made at a

later time as a copy of the earlier piece.

INPAINTING:

Similar to overpainting, this is a technique commonly used by conservators to unify a painting which has

suffered paint loss. Inpainting is paint applied over paint losses on a canvas or other media.

INTERNAL REVENUE CODE:

This is the tax law which has been structured and passed by Congress and signed by the President of the

United States and remains the ultimate authority on tax matters until it is changed or amended by Congress.

Internal Revenue Regulation 1.170.A relates to Income Tax Charitable Deductions and allows as a deduction

any charitable contribution which is made during the taxable year. Section 1(c) (1) provides that if a charitable

contribution is made in property other than money the amount of the contribution is generally the fair market

value of the property at the time of the contribution. Section 1(c)(2) provides that the fair market value is the

price at which the property would change hands between the willing buyer and the willing seller with neither

being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts. Section

13 states information regarding the record keeping and return requirements for deductions for charitable

contributions. For a deduction for a charitable contribution of property in excess of $5,000, Section 13(c)

requires that a qualified appraisal be prepared. Internal Revenue Regulation 20.2031 relates to the Estate

Tax. Section 2031 provides that the value of the gross estate of a decedent is determined by including the

value at the time of death of all property wherever it is situated. Section 20.2031-1(b) provides that the value

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of the property is includible in a decedent’s gross estate is its fair market value at the time of the decedent’s

death. Section 2032(a) provides that the executor may elect to determine the value of all the property in the

gross estate as of six months after the decedent’s death. This is known as the Alternate Date of Valuation.

Property distributed, sold, exchanged or otherwise disposed of within the six months after death must be

valued as of the date of distribution, sale, exchange or other means. Section 20.2031-6(b) provides that if

there are items among the personal effects or the household, articles with artistic or intrinsic value of a total in

excess of $3,000, an appraisal, under oath, must be filed with the estate tax return. Section 20.2031-6(b)

provides that if expert appraisers are employed, care must be taken to see that the appraisers are reputable

and of recognized competency to appraise the particular class of property involved.

JOINT AND FRACTIONAL GIFTS:

On occasion a number of people with equal or unequal ownership may donate an object or a group of objects

to a non-profit institution. Separate appraisal with separate values must be made for each of the donors.

LAUNDRY LIST:

This refers to a listing of object, similar to an inventory with no description and no information regarding the

object other than exactly what it is without any measurements. Listing objects in this cursory and seemingly off

hand manner is inappropriate for a professional appraiser to use when preparing an appraisal report.

LETTER OF TRANSMITTAL:

This letter, addressed to the client accompanying the appraisal, is a summary of the appraisal. This letter must

include all of the elements of USPAP including the name of the client, the purpose of the appraisal, the date of

the appraisal and the effective date of the appraisal, for whom the appraised is being executed, where and

when the property was seen, value and the definition of value used, the valuation methods and market

analyses, the number of items appraised, the total value of those items, the number of pages in the report, the

statement of disinterest on the part of the appraiser, the statement of the fee structure, the credentials of the

appraiser, the statement of compliance with a given code of ethics, a statement that the report can only be

presented in its entirety, a statement that the appraisal can only be used by the party or parties for whom it

was written and only for the stated purpose and the appraiser’s tax identification number (the latter only for

IRS donation appraisals). In the instance of a charitable donation appraisal, the appraiser may include the

name of the donee institution in the letter. All assumptions, extraordinary assumptions, hypothetical and

limiting conditions must also be included in a transmittal letter.

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LINED:

This term usually refers to a painting on canvas that has been supported by another layer of canvas due to the

deterioration of the original support.

LIQUIDATION VALUE:

This value is based on the price realized in a sale situation under moderately forced or limiting conditions and

under time constraints. This action may be initiated by the owner or a crediting institution. It is implicit in this

definition that Liquidation Value will generally be lower than other types of valuation.

LKQ (LIKE, KIND, QUALITY):

This abbreviation stands for the insurance terms LIKE, KIND, QUALITY and is the equivalent of an object with

comparable attributes.

Long Term Capital Gains Property:

This is an IRS concept used in conjunction with donation appraisals. It refers to property that has been held for

a designated period of time, after which the owner, upon donation, is entitled to a tax deduction based on the

object’s fair market value on the specified dates of valuation.

MARGINAL UTILITY:

In economics, under the mainstream assumptions, the marginal utility of a good or service is the increase in

usefulness obtained by consuming or using one more unit of that good or service. The concept is derived from

attempts by economists to explain the determination of price. The consumer’s decision to buy is not all or

nothing. Instead, it is a decision to buy or not to buy just one more unit. That means it is a mistake to look at

the total utility of the two goods as the basis for demand. The total utility is irrelevant to the decision to buy or

not to buy one more unit. What is relevant to any decision is what is gained or lost depending on how the

decision is made and only a part of the total utility is gained or lost as a result of the decision to buy or not to

buy one more unit of the good. Economists call the part of utility that is gained or lost in the decision to buy one

more unit the marginal utility

MARITAL DEDUCTION:

This is a tax provision which allows one spouse to transfer upon death an unlimited amount of property to

his/her spouse without incurring estate or gift taxes.

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MARKET VALUE (MV):

This value is the most probable price at which a property would sell in a competitive and open marketplace

where the sale needs to be consummated within a specified time frame and neither the buyer nor the seller

are under a compulsion to buy or sell. In addition, the object to be sold needs to have had sufficient market

exposure for a reasonable amount of time and payment is made in terms of cash in American dollars or

comparable financial arrangements are made. This term is essentially the same as fair market value except

this term does not have the provision stating that there is no compulsion to buy or sell within a specified period

of time. USPAP cautions appraisers to identify the exact definition of market value and its authority applicable

in each appraisal completed for the purpose of market value.

MARKETABLE CASH VALUE (MCV):

This is a net value usually for equitable distribution, resale or estate planning purposes. The value realized, net

of expenses, by a willing seller disposing of property in a competitive and open market to a willing buyer, both

being reasonably knowledgeable of all relevant facts, and neither being under constraint to buy or sell.

Marketable cash value takes into consideration insurance, dealer commissions, advertising, travel and

shipping expenses that may be involved in the sale. Implicit in this definition is that a sale takes place within

an agreed upon time period with a specified method of payment and that the sale take place in the best

available marketplace and that sufficient time is allowed to advertise the property properly. This term is usually

for equitable distribution, when tangible property may be exchanged for cash or other financial arrangements

or resale or estate planning purposes.

MARRIED, ASSEMBLED OR ASSOCIATED PIECES:

See ASSEMBLED (Above)

MEDIATION:

This is a way to settle a dispute and is a process by which parties to a dispute voluntarily select an impartial

third party to facilitate a resolution of the issues by the parties themselves. The need for mutual agreement is

deemed by some to be the major weakness in the mediation process. If one of the parties is unreasonably

stubborn, it will be difficult to reach an agreement.

MEDIUM:

There are at least four definitions of this term: 1.) The material the item is made from or the art is produced

upon and may include white or black paper, canvas, board, cel (acetate), sculptures; 2.) The specific tool and

16

material used by an artist, e.g., brush and oil paint, chisel and stone; 3.) The mode of expression used by the

artist, e.g., painting sculpture, the graphic arts; 4.) A liquid that may be added to a paint to increase its

manipulability without decreasing its adhesive, binding or film forming properties.

METHOD OF CONSTRUCTION:

This describes the way or ways in which an object has been made.

MICROSCOPY:

This is the in-depth microscopic evaluation of an object to determine its age and/or authenticity.

MINT CONDITION:

This term describes artwork or objects which are in the same condition as when they were originally finished,

printed, made. A term taken from coinage, this is the same condition as when it was minted.

MOST APPROPRIATE MARKET OR MARKETPLACE:

This is the venue in which the appraiser determines an object can be sold most easily and at the highest price.

Frequently in the case of personal property, where comparables are scarce, the most appropriate market can

be a combination of auction and private gallery sales.

NO COMMERCIAL VALUE:

This usually refers to an object, a group of objects for which it is not reasonable to assign a monetary value,

usually in estate situations and this might include the mattress and box spring.

OBJECT IDTM :

A generic classification methodology codified by the Getty Information Institute (Getty Museum) which lists nine

fields for the minimum description of all works of art.

OF THE PERIOD, RIGHT or CORRECT:

An object which has been made at or during the time ascribed to it.

OPPORTUNITY COST:

The advantageous price one would pay for purchasing in bulk.

ORDERLY LIQUIDATION VALUE (OLV):

This term, a low range net value usually for quick sales purposes, is defined as the most probable price in

terms of cash or other precisely revealed terms for which the property would change hands under required and

limiting conditions in an orderly manner and generally advertised and with knowledgeable buyers advised.

17

ORPHAN:

This term refers to a single piece left from a set or a pair.

OVERPAINTING:

This explains when paint is applied to a painting over already dry areas of paint. Sometimes used to include the

original artist’s glazes and sometimes especially used in conservation, this term means only later restorers’

work. Overpainting is similar to inpainting (see above) except only inpainting fills in lost areas without covering

the original paint.

OXIDATION:

This is the binding of oxygen to a metal to form rust or the binding of oxygen to wood to darken it.

PARTIAL APPRAISALS:

This type of appraisal is an estimate of the value of the object or objects as requested by the client wherein the

client does not want a written professional, thoroughly researched appraisal document. The appraisal is

usually presented in a verbal form or the written document does not follow the proscribed proof of valuation or

the necessary boiler plate language to protect the appraiser. If the appraiser has an Errors and Omission

insurance policy, he/she may be in violation of that policy by presenting a partial appraisal. Using a POV,

discussed herein, is advisable. N.B. This is in strict opposition to USPAP.

PATINA:

This is the buildup of a film produced by oxidation on the surface of an object. This term also refers to the final

coating that is applied to a bronze by the artist or the foundry crafting the bronze.

PERSONAL PROPERTY:

Defined by USPAP as “identifiable tangible objects that are considered by the general public as being

“personal” for example, furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and

equipment; all tangible property that is not classified as real estate.” USPAP does not mention that there are

two general classifications of personal property: depreciable personal property or property that is expected to

depreciate in value over time, and appreciable personal property or property that has the potential of

increasing in value over time. Most machinery and equipment will depreciate in value once they are used,

while art, antiques and collectibles have the potential of increasing in value as the demand in the collectors’

marketplace increases as time goes by.

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PREMIUM:

See buyer’s premium, seller’s premium and hammer price.

PRESERVATION:

Related to conservation and restoration, preservation actions are taken to prevent further changes or

deterioration in objects, sites or structures. See CONSERVATION and RESTORATION also.

PRIMARY MARKET:

The primary market is one created either by the maker or agent of the maker when an object is sold for the

first time, usually in galleries or stores. The secondary market is the venue for the sale of an object between a

seller and a buyer with neither of having participated in the creation or initial sale of the object. In the instance

of multiples, a valid secondary market cannot exist while the maker or his agent retains a supply of the original

offering.

PRIMARY SOURCE:

This material, used in research and data comparisons, is from a first hand witness and includes auctions

attended, galleries, art fairs and stores visited and actual comparables witness by the appraiser.

PRIMARY WOOD:

A piece of period furniture is usually made from two different types of woods, the first being the primary wood

or the use of more of this wood which is seen on the outside as opposed to secondary wood, usually reserved

for use in the interior of the case.

PRINCIPLE OF CHANGE:

Change recognizes the shifting importance of other principles and explains the cycles of market development,

stabilization, decline and renewal

PRINCIPLE OF CONTRIBUTION:

This term often relates to the “good, better, best” qualities of an item

PRINCIPLE OF PROGRESSION:

This term refers to the increase in interest/value that lower valued items may realize from their association

with higher value items.

PRINCIPLE OF REGRESSION:

This term states that higher valued items may suffer a decrease in value from association with lower-valued

properties.

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PRINCIPLE OF CONTRIBUTION:

This term often relates to the “good, better, best” qualities of an item

PRINCIPLE OF REVERSILITY:

Whatever process is used to restore a painting or a piece of furniture, pottery or porcelain needs to be able to

be reversed so that if, in time, what was done is shown not to be appropriate then that restoration can be

removed and the object can be returned to the state in which it was prior to the restoration job.

PRISTINE/MINT/PROOF CONDITION:

Excellent condition, as if new and usually in its original packaging or box

PRIVATE LETTER RULINGS:

From time to time the IRS sets forth specific rulings in response to requests from individual tax payers. These

rulings are specific to the case by case situations presented by the taxpayer. While these rulings cannot be

used as vehicles for precedent setting, they do reflect the reasoning of the IRS and give clear indications of

how the IRS will react if a similar situation in another case is brought to their attention. All taxpayers and

appraisers would be well advised to study these rulings closely.

PRIVATE TREATY SALE:

This is a sale which occurs following an auction where the object being sold did not sell at the event and sells

privately thereafter.

QUALIFIED APPRAISER:

A Qualified Appraiser Is an individual who has earned an appraisal designation from a recognized professional

appraiser organization or has otherwise met minimum educational and experience requirements set forth in

regulations prescribed by the IRS. The minimum education and requirements are met if the appraiser has

successfully completed college or professional level course work that is relevant to the property being valued;

obtained at least two years of experience in the trade or business of buying, selling or valuing the type of

property being valued; regularly performs appraisals for which the individual receives compensation; and

meets such other requirements as may be prescribed by the IRS in regulations or other guidance.

QUALIFIED APPRAISAL:

A Qualified Appraisal is an appraisal conducted by a qualified appraiser in accordance with generally accepted

appraisal standards. The IRS further states that an appraisal will be treated as having been conducted in

accordance with generally accepted appraisal standards if it is consistent with the substance and principles of

20

the Uniform Standards of Professional Appraisal Practice also knows as USPAP. For donation purposes the

appraisal report must be prepared by a qualified appraiser not more than sixty days before the date of the

contribution of the appraised property. The appraisal must be signed and dated by a qualified appraiser who

charges an appraisal fee that is not based on a percentage of value and that contains the following

information: a detailed description of the property; the physical condition of the property; the date or expected

date of the contribution; the terms of any agreement or understanding entered into or expected to be entered

into by or on behalf of the donor that relates to the use, sale or other disposition of the property contributed;

the name, address and taxpayer identification number of the appraiser; a detailed description of the

appraiser’s background and qualifications a statement that the appraisal was prepared for income tax

purposes; the date on which the property was valued; the appraised fair market value of the property; the

method of valuation used to determine the fair market value; the specific basis for the valuation including any

comparable sales transactions and a description of the fee arrangement between the donor and the appraiser.

REAL PROPERTY:

This refers to land and the building/s attached to the land. For a building to be part of real property, the land

and the building must share the same title. If not, the building becomes part of personal property.

RECTO:

This refers to the right hand page of a book or the front side of a leaf or picture, on the other side of VERSO.

REFINISHED CONDITION:

This occurs when a piece has been stripped or skinned of its original patina and now sports a new finish.

REFRESHED CONDITION:

This is a relatively new term which refers to the repainting of a piece of furniture.

RELATED USE RULE:

This IRS rule is applied to charitable contributions and states that to receive the full allowable tax deduction a

donor must donate property to an institution whose mission explicitly includes the acquisition and use of such

property.

REPLACEMENT VALUE:

The amount it would cost to replace an item with one of similar and like quality purchased in the most

appropriate marketplace within a limited amount of time. Replacement value is applied, almost exclusively, to

insurance policies and is generally the highest valuation figure for personal property.

21

REPRODUCTION:

This term refers to a piece made as an exact copy or in the mirror image of the original of a period piece but is

not made to deceive.

RESALE VALUE:

This is the price at which the item can be sold in the marketplace.

RESERVE:

This term refers to the minimal amount for which a consignor agrees to sell a work for at auction. By law, the

reserve must be at or below the low estimate. Typically a reserve is about 50 to 25% below the low estimate.

RESTORATION:

This is the process whereby, if an object has lost a part and that missing part or piece is replaced or restored to

simulate the original the object can be returned as closely as possible to its original condition. See

CONSERVATION and PRESERVATION also.

RETAIL REPLACEMENT VALUE (RRV):

This is the highest value, usually for insurance purposes and is defined as the highest amount in terms of US

dollars that would be required to replace a property with another of similar age, quality, origin, appearance,

provenance and condition within a reasonable length of time in an appropriate and relevant market. When

applicable, sales and or import tax, commissions and or premiums are included in this amount.

RETAIL VALUE:

Used to establish a price guideline for retail pricing, the appraised retail value is derived from retail

replacement value. It is defined as a reasonable amount in terms of US dollars that would be required to

purchase a property of similar age, quality, origin, appearance, provenance and condition with a reasonable

length of time in an appropriate and relevant market. Unlike retail replacement value, retail values do not

include any fees or additional costs such as taxes, framing, conservation, restoration and additional

commissions.

RETAIL REPLACEMENT VALUE (RRV):

This term is defined as the highest amount in terms of US dollars that would be required to replace a property

with another of similar age, quality, origin, appearance, provenance and condition within a reasonable length of

time in an appropriate and relevant marketplace. Usually used for insurance purposes, also included in this

amount, when applicable are sales and/or import tax, commissions and/or premiums.

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REVENUE PROCEDURES (REV. PROC.):

Revenue Procedures are termed “guidelines” by the IRS. They set forth a methodology for dealing with general

situations. The taxpayer and the appraiser would be well advised to take these guidelines seriously and to

view them as IRS requirements rather than elective procedures which the term “guideline” may indicate to the

inexperienced appraiser. The IRS expects these guidelines to be followed and the courts have indicated that

this expectation is reasonable. In addition the IRS has been known to apply these guidelines to appraisal

situations which may not be specifically addressed in the guidelines themselves. For example, Rev. Proc. 66-

49 sets forth guidelines for donation appraisals; however, the IRS has been known to ask for the reporting

elements stated in these guidelines to be followed for estate appraisals as well.

REVENUE RULINGS:

These rulings complement the private letter rulings discussed above. While the private letter rulings are

directed to specific cases brought to the attention of the IRS, the revenue rulings set forth the general

principles addressed in specific private letter rulings. They also give tax consequences applicable to the

general situations addressed in the rulings.

RIGHT, CORRECT or OF THE PERIOD:

This term indicates that the object that is of the period, by the ascribed artist and is not a reproduction.

SALVAGE VALUE (SV):

This is a valuation term implying abandonment by the rightful owner in which the person recovering the

property may be entitled to a pre-agreed percentage of any net price realized in a future sale. Although there

have been some exceptions, salvage is generally the lowest or rock bottom price realized in a sale situation.

This is the net price in cash or other precisely revealed terms for which the property would change hands if sold

immediately without regard to the relevant marketplace and appropriate use. In certain cases, this may be a

negative value because labor and other costs may be required to disassemble and dispose of the property in a

quick, forced and expedient manner.

SCHEDULED ARTICLES:

This term is used by insurance companies when articles of personal property are individually listed, described

and valued on an insurance policy. Although some insurance companies will accept a receipt of a recent

purchase, the schedule is typically based on an appraisal. Typically scheduled items carry a lower insurance

premium than items which are under a blanket insurance policy.

23

SECONDARY MARKET:

This term refers to the marketplace where a used object is bought and sold. Once an item is no longer

available from the original source, it is considered a secondary market item and usually refers to the auction

market and is in no way associated with the value or the condition of the object. The secondary market is the

venue for the sale of an object between a seller and a buyer with neither of them having participated in the

creation or initial sale of the object, usually through auction but can also be in galleries. In the instance of

multiples, a valid secondary market cannot exist while the maker or his agent retains a supply of the original

offering.

SECONDARY SOURCE:

Examples of secondary sources utilizing exact primary sources in research and data comparison are ArtNet,

ArtFact, P4a, Gordonsart, Art-Sales-Index, newel.com and other Internet research tools.

SELLER’S PREMIUM

This is the percentage of the bid or “hammer” price paid by the seller to the auction when selling an item. The

fee ranges from nothing to 35% and may be more negotiable than the Buyer’s Premium. See also BUYER’S

PREMIUM and HAMMER PRICE.

SENTIMENTAL VALUE:

This is never a monetary value but rather an emotional valuation not based on market factors or aesthetics.

SKINNED CONDITION:

This term refers to a piece of furniture which has been stripped of its original patina and also describes a paper

condition where skinned paper indicates the paper has lost a layer of fibers.

SS (STERLING SILVER):

This is the acronym for sterling silver objects and is often required by insurance companies to designate the

objects on a written report which may be subject to a higher insurance premium.

STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS:

These terms or concepts are generally linked together in most appraisals. An ASSUMPTION is that which is

taken to be true. An EXTRAORDINARY ASSUMPTION is an assumption, directly related to a specific assignment,

which, if found to be false, could alter the appraiser’s opinions or conclusions. A LIMITING CONDITION refers to

conditions that limit the appraiser’s examination or research of the appraised items and the appraisal

assignment. HYPOTHETICAL CONDITIONS are those which are contrary to what exists but are supposed for the

24

purpose of analysis. According to USPAP, all assumptions and conditions must be listed and qualified in every

appraisal.

STEPPED UP BASIS:

This is a tax term and refers to a value that is used to determine profit or loss when property is sold. If

someone inherits property that has increased in value since the deceased person acquired it, the tax basis of

the new owner is stepped up to the market value of the property at the time of death. The stepped up basis

means that when the property is eventually sold there will be less taxable gain.

STYLE; IN THE STYLE OF:

This refers to a piece made after the original would have been made and has the same features as the original

just made years later.

TAX IDENTIFICATION NUMBER (TAX ID):

The tax ID number is an IRS term and requirement. In most cases, this is the social security number of the

appraiser which the IRS requires the appraiser to list in certain types of appraisals with the appraiser’s

signature. In this way, the IRS can impose sanctions on the appraiser should they be warranted.

TERTIARY MARKET:

This marketplace occurs in a forced sale situation such as liquidation or salvage sales.

TESTIFYING EXPERT:

This is an appraiser who not only provides technical expertise and background knowledge to the attorney and

the client in a litigious situation but is also used on the witness stand to explain complex valuation issues and

to express expert opinions and conclusions as they relate to the object or objects in dispute. Such expertise

may be related to the quality of the object, the value or the object or the methodology of the opposing

appraiser. The work of the testifying expert is discoverable in court.

THERMOLUMINESCENT TEST:

This is the definitive way to tell the true age of pottery, stoneware, porcelain, bronze and terra cotta. There are

a handful of thermoluminescent labs worldwide which perform the thermoluminescent test. The most

prominent lab is in Oxfordshire, England. Today most large auction houses will not put an item on sale without

a certificate showing that the test has verified the artifact’s age. To test an object’s thermoluminescence, a

small sample (about 100 milligrams) is heated to extreme temperatures. Most mineral materials store up

increasing amounts of radioactive energy that is drawn from radioactive decay in and around the mineral.

25

When heated (thermo), most minerals release the stored energy in the form of light (luminescence). By

measuring the amount of light released from a material, one can calculate how many years have passed since

the artifact was fired. Generally, the more light released the older the item is.

ULTRAVIOLET LIGHT (UV):

These are short, high energy invisible light waves beyond violet in the spectrum of light with a length of 250 to

400 nanometers.

UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP):

These are the appraisal procedures and guidelines for conducting and writing appraisals published by the

Appraisal Standards Board of The Appraisal Foundation. First codified in 1987, these standards apply to all

disciplines of appraising and are predicated on the concept that there is common methodology which can be

found in all aspects of appraisal practice including appraisal, appraisal review and appraisal consultancy.

VALUATION APPROACHES:

COMPARATIVE MARKET DATA APPROACH:

This is the most commonly applied approach when appraising personal property in which appraised value is

based upon past prices for similar works by the same artist or artisan or similar works by another artist or

artisan of equal standing and related reputation.

COST APPROACH:

This approach is used to determine the value of an object based upon the cost of duplicating or recreating the

identical piece. This approach may be applied to the decorative arts when the methods of construction or

materials used are replicable and of significant inherent value.

IINCOME APPROACH:

This approach is used to determine the value of a work of art or object which will be used to generate future

income. This is most often done through leasing, rental or creating reproductions but not through a one-time

only sale with transfer of title and/or copyright.

VALUE:

This is a dollar amount dependent upon the type of appraisal report being written: insurance, IRS, equitable

distribution for divorce proceedings or liquidation. The appraiser must state which value is being used and give

a clear, concise definition of that value and cite the source for the definition.

26

VALUE IN EXCHANGE:

This term refers to the ability to trade an item or asset, especially money, for other goods and services that can

then be used to satisfy wants and needs. Value in exchange means that value that is satisfaction, is obtained

indirectly through the acquisition of something else. For an item to have value in exchange, it need NOT have

value in use, value obtained directly from the consumption of a good or service.

VALUE IN USE:

This term refers to the satisfaction of wants and needs provided by the direct consumption of goods and

services. Acquiring value from the use of goods and services is really the ultimate goal of economic activity. It is

the final step in the production, allocation and consumption activities that are undertaken to address the

fundamental problem of scarcity. Value in use should be contrasted with the similar phrase VALUE IN

EXCHANGE.

VERSO:

This term refers to the left hand page of a book or the back side of a leaf or a picture on the other side of

RECTO.

VINTAGE:

This is a widely used term referring to an object that was formerly in vogue but not more than 100 years old.

This definition may vary by object, i.e., a vintage fountain pen is generally thought to be one manufactured pre-

1965.

WATERMARK:

This is a design left in the paper by the paper manufacturer and is seen when the paper is held against the

light. This mark is used to trace the origin of the paper. Special markings for an artist or publisher may

incorporate a signature or a device and can be used to detect fakes although even watermarks can be faked.

Watermarks on hand made papers are made by very low relief molds or designs of fine wire set on the screen

on which the moist pulp collects.

WORK SIZE:

This refers to the dimensions of works on panel or board. When the word “sight” is used in conjunction with

work size, it refers to the dimensions of the visible image of the work.

Values

Retail Replacement Value (RRV) Highest Value (Usually for Insurance Purposes) is defined as the highest amount in terms of US dollars that would be required to replace a property with another of similar age, quality, origin, appearance, provenance, and condition within a reasonable length of time in an appropriate and relevant market. When applicable, sales and / or import tax, commissions and/or premiums are included in this amount. (NYU Appraisal Studies Program definition)

Auction Replacement Value (ARV) (Usually for Insurance Purposes) is defined as a reasonable amount in terms of US dollars that would be required to replace a property with another of similar age, quality, origin, appearance, provenance and condition within a reasonable length of time in an appropriate and relevant auction market. Since the client regularly and routinely buys at auctions, the appraisers rarely examined the retail market. When applicable, sales and/or import tax, commissions and/or premiums are included in this amount.

Retail Value (Used to Establish a Price Guideline for Retail Pricing) Appraised “retail value” is derived from “retail replacement value.” It is defined as a reasonable amount in terms of US dollars that would be required to purchase a property of similar age, quality, origin, appearance, provenance, and condition within a reasonable length of time in an appropriate and relevant market. Unlike “retail replacement value,” “retail value” does not include any fees or additional costs, such as taxes, framing, conservation, restoration, and additional commissions.

Fair Market Value (FMV) – Middle “Secondary Market” Value (Usually for IRS Purposes) as defined by IRS Section 1.170 and 20.2031 (b) is “the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having a reasonable knowledge of relevant facts.” According to Technical Advisory Memorandum 9235005 (May 27, 1992), fair market value should include the buyer’s premium.

20.2031 (b) continues “the fair market value of an item of property includible in the decedents’ gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of that item in a market other than that in which such item is com-monly sold to the public, taking into account the location of the item wherever appropriate. Thus, in the case of an item of property includible in the market, fair market value of such an item of property is the price at which the item or a comparable item would be sold at retail.”(Treasury Regulation Section 1.170A - 13©) (3) (1998)

Marketable Cash Value (MCV) – Middle/Low “NET” Value (Usually for Equitable Distribution, Resale or Estate Planning Purposes) is defined as the net value a willing seller realizes after disposing of property in a competitive and open market to a willing buyer. Both the buyer and seller must be reasonably knowledgeable of all relevant facts, and neither being under constraint to buy or sell. Marketable cash value takes into consideration insurance, dealer commissions, advertising, travel, and shipping expenses that may be involved in the sale.

Coverage Details

� Broad definition of Professional Services includes personal

property appraising, expert witnessing, court testimony, art

consulting and public speaking

� Policy available with multiple limit and multiple deductible

options to fit your business needs or to meet contractual

obligations

� Travelers can also add a $25,000 limit for first party ID

Fraud Expense Reimbursement for you and your employees

What You Will Get

Fast Turnaround time. With a completed application and

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An A+ rated insurer, Travelers, who is extremely stable in

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A trusted insurance advisor, DeWitt Stern, who has the abili-

ty to service any of your business's other insurance needs

Please see policy contract for exact terms and conditions of

coverage and applicable exclusions.

Errors & Omissions Insurance Applications from members of

the Appraisers Association of America should be mailed

directly to:

Robert Rosenzweig

Associate Account Executive

DeWitt Stern

420 Lexington Avenue, Suite 2700

New York, NY 10170

(212) 297-1470

[email protected]

PROFESSIONAL LIABILITY INSURANCE FOR AAA MEMBERS

Offered by Appraisers Association of America and DeWitt Stern and underwritten byTravelers Insurance Company

www.dewittstern.comSan Francisco

415.677.6000

Chicago

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Los Angeles

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New York

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7/03 APPROPRIATE MARKETS PURPOSE OF APPRAISAL DEFINITION OF VALUE MARKET LEVEL APPROACH Insurance RRV Retail/major & Cost/Market Comparison Inventory minor auction Insurance RRV Retail/major & Cost/Market Comparison/ Loss minor auction Income Insurance RRV/SV Retail/major & Cost/Market Comparison/ Damage minor auction Income IRS - Estate FMV Major & minor Market Comparison (No spouse) auction/retail IRS - Estate (spouse) FMV Major & minor Market Comparison (Cap. Gains) auction/retail IRS - Donation FMV Major & minor Market Comparison

auction/retail IRS - Gift FMV Major & minor Market Comparison

auction/retail IRS - Loss FMV Major & minor Market Comparison (No Insurance) auction/retail Equitable MCV/SV Major & minor Market Comparison Distribution auction (Divorce Business Dissolution, Estate Planning) Resale MCV Major & minor Market Comparison

auction Orderly MCV/LV/SV Major & minor Market Comparison Liquidation auction/consignment Disorderly MCV/LV/SV Minor auction Market Comparison Liquidation Flea market Courtroom Testimony RRV/FMV/MCV/ Retail/auction/ Market Comparison/ LV/SV etc. Cost/Income Verbal DO NOT DO!!! NOTE - PLEASE BE AWARE THAT EXCEPTIONS EXIST IN EACH CATEGORY. RRV = Retail Replacement Value FMV = Fair Market Value MCV = Marketable Cash Value LV = Liquidation Value SV = Selvage Value

SAMPLES OF VERBIAGE FOR NEW USPAP REQUIREMENT REGARDING THE ETHICS

RULE ABOUT PAST EXPOSURE TO THE APPRAISED OBJECT USPAP 2010-2011 Edition The Appraisal Foundation Ethics Rule, Page A-8

231 If known prior to accepting an assignment, and/or if discovered at any time during the assignment, 232 an appraiser must disclose to the client, and in the subsequent report certification: 233 ! any current or prospective interest in the subject property or parties involved; and 234 ! any services regarding the subject property performed by the appraiser within the three 235 year period immediately preceding acceptance of the assignment, as an appraiser or in any 236 other capacity. 237 Comment: Disclosing the fact that the appraiser has previously appraised the property is permitted 238 except in the case when an appraiser has agreed with the client to keep the mere occurrence of a 239 prior assignment confidential. If an appraiser has agreed with a client not to disclose that he or she 240 has appraised a property, the appraiser must decline all subsequent assignments that fall within the 241 three year period.

APPRAISER’S PAST EXPOSURE TO OBJECT: Since 2003, the appraiser has viewed this on several occasions at the client’s home. The appraiser included object in the client’s insurance appraisal. APPRAISER’S PAST EXPOSURE TO OBJECT: Although the appraiser has appraised this print for other clients, to the appraisers knowledge, this is her first time appraising this particular numbered edition. APPRAISER’S PAST EXPOSURE TO OBJECT: Although the appraiser has appraised silver in this pattern for other clients, to the appraisers knowledge, this is her first time appraising pieces in this particular service. APPRAISER’S PAST EXPOSURE TO OBJECT: Although the appraiser has appraised similar items of furniture for other clients, to the appraisers knowledge, this is her first time these particular items. APPRAISER’S PAST EXPOSURE TO OBJECT: Since the appraiser has been in the auction business for twenty years, it is impossible to remember every item the appraiser has examined and/or sold. As such, although the appraiser cannot guarantee that he has not been exposed to this item in the past, the appraiser does not recall having any exposure to this work in any capacity for at least the past three years. APPRAISER’S PAST EXPOSURE TO OBJECT: The appraiser sold this table to the client in 2008. APPRAISER’S PAST EXPOSURE TO OBJECT: The appraiser appraised this ring for the estate of Cruella D. Head, the client’s mother, in 2009. No breach of confidentiality occurred as the appraiser’s signed contract with the Estate includes a disclosure release. APPRAISER’S PAST EXPOSURE TO OBJECT: The appraiser was familiar with this painting as it sold at the gallery, The Good Art Gallery, where the appraiser had previously been employed as an archivist, 2002-2008. The appraiser was not involved in the sale of the painting. APPRAISER’S PAST EXPOSURE TO OBJECT: The appraiser was retained by the client as a photographer and to make a transparency of this painting in June 2008 for a potential sale. The appraiser was not involved in the sale negotiations. APPRAISER’S PAST EXPOSURE TO OBJECT: The appraiser discussed this chair in her book entitled, French Chairs of the 1950s, published by Claverack Books, Hudson, New York in 2008. At that time it was owned by the current client.

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