The FBI is alerting art collectors and dealers to be particularly careful trading Near Eastern antiquities, warning that artifacts plundered by terrorist organizations such as ISIL are entering the marketplace.
“We now have credible reports that U.S. persons have been offered cultural property that appears to have been removed from Syria and Iraq recently,” said Bonnie Magness-Gardiner, manager of the FBI’s Art Theft Program.
The Bureau is asking U.S. art and antiquities market leaders to spread the word that preventing illegally obtained artifacts from reaching the market helps stem the transfer of funds to terrorists.
Please be cautious when purchasing items from this region. Keep in mind that antiquities from Iraq remain subject to Office of Foreign Assets Control sanctions under the Iraq Stabilization and Insurgency Sanctions Regulations (31 CFR part 576).
Purchasing an object looted and/or sold by the Islamic State may provide financial support to a terrorist organization and could be prosecuted under 18 USC 233A.
Robust due diligence is necessary when purchasing any Syrian or Iraqi antiquities or other cultural property in the U.S. or when purchasing elsewhere using U.S. funds.
In February, the United Nations Security Council unanimously passed Resolution 2199, which obligates member states to take steps to prevent terrorist groups in Iraq and Syria from receiving donations and from benefiting from trade in oil, antiquities, and hostages.
Before purchasing an item from suspected areas, ask questions and verify:
Which country did this come from?
Do you have the proper paperwork?
What is the provenance or history of the object’s ownership?
A Circle of Trust has been established by the three major professional societies for personal property appraisers to jointly promote education to the public regarding the importance of using credentialed appraisers. They include the International Society of Appraisers, American Society of Appraisers and the Appraisers Association of American. The joint announcement states:
Members of these associations earn their credentials through a stringent admissions, training and testing process, are required to comply with IRS and AQB guidelines, adhere to a code of ethics, and to complete continuing education requirements. These qualifications provide a level of professionalism that is unmatched, and ensure the public that appraisals performed by an accredited appraiser are among the most reliable appraisals available.
All three organizations strongly urge the public to verify the educational and experiential background of an appraiser prior to retaining their services, and to be wary of red flags that indicate an appraiser may not be objective in conducting appraisals. These include charging for appraisals based on the appraised value of an item, or offering to purchase an item the appraiser has appraised. Professional, competent appraisers always conduct appraisals at “arm’s length,” without self-interest.
The full news release and contact information for the three societies can be found at PRSYNC.
You may have seen the fairly new television series on Bravo titled “Untying the Knot”. It features a prominent divorce mediator helping couples split up their joint assets.
As part of the process, appraisers are brought in to value the personal property. The level of value may vary slightly by state, however in California the appropriate level is “Fair Market Value”. For television purposes, the appraisers are verbally reporting the values. In real life, a written appraisal report must be provided. It is important to choose an impartial and credentialed appraiser who may be called to testify at formal mediation or court.
In most cases, property owned prior to the marriage is separate and retained by the individual. Individuals with large collections or family heirlooms may want to consider having their items documented and appraised as part of their pre-nuptial planning.
As an appraiser, I cannot give legal advice. Please consult a professional attorney.
Kathi Jablonsky, ISA CAPP is a certified appraiser of personal property designated in Antiques and Residential Contents with the International Society of Appraisers. She is based in Southern California and serves the San Diego and Palm Desert regions.
As an appraiser, I receive calls daily from potential clients saying they have an antique to be evaluated. If the caller is in their twenties, they may be speaking about something only 30 years old. On the other hand, if I ask a room full of senior citizens how many of them think they are antiques, the majority of people in the room raise their hands. It’s a matter of perception.
Although we may see varying descriptions, there is a U.S. government definition for an antique. Guidelines were originally established by the U.S. Customs Service for import tariffs. In the Tariff Act of 1930 an antique was defined as an object made before 1830, after which mass production became common. In 1993, Title VI of the North American Free Trade Agreement Implementation Act (Pub. L. 103-182, 107 Stat. 2057), also known as the Customs Modernization or “Mod” Act, became effective. These provisions amended many sections of the Tariff Act of 1930 and related laws. Thus, there is a rule of 100 years old to describe something as “antique”.
Kathi Jablonsky, ISA CAPP is a full time personal property appraiser designated in Antiques and Residential Contents with the International Society of Appraisers. She is based in Southern California and serves the San Diego and Palm Desert regions.
The IRS has released a list of tips to assist with obtaining tax deductions on charitable contributions. For non-cash contributions with a fair market value of $5,000 or more, a qualified appraisal is required by a “Qualified Appraiser”. See tip #9.
Giving to charity may make you feel good and help you lower your tax bill. The IRS offers these nine tips to help ensure your contributions pay off on your tax return.
If you want a tax deduction, you must donate to a qualified charitable organization. You cannot deduct contributions you make to either an individual, a political organization or a political candidate.
You must file Form 1040 and itemize your deductions on Schedule A. If your total deduction for all noncash contributions for the year is more than $500, you must also file Form 8283, Noncash Charitable Contributions, with your tax return.
If you receive a benefit of some kind in return for your contribution, you can only deduct the amount that exceeds the fair market value of the benefit you received. Examples of benefits you may receive in return for your contribution include merchandise, tickets to an event or other goods and services.
Donations of stock or other non-cash property are usually valued at fair market value. Used clothing and household items generally must be in good condition to be deductible. Special rules apply to vehicle donations.
Fair market value is generally the price at which someone can sell the property.
You must have a written record about your donation in order to deduct any cash gift, regardless of the amount. Cash contributions include those made by check or other monetary methods. That written record can be a written statement from the organization, a bank record or a payroll deduction record that substantiates your donation. That documentation should include the name of the organization, the date and amount of the contribution. A telephone bill meets this requirement for text donations if it shows this same information.
To claim a deduction for gifts of cash or property worth $250 or more, you must have a written statement from the qualified organization. The statement must show the amount of the cash or a description of any property given. It must also state whether the organization provided any goods or services in exchange for the gift.
You may use the same document to meet the requirement for a written statement for cash gifts and the requirement for a written acknowledgement for contributions of $250 or more.
If you donate one item or a group of similar items that are valued at more than $5,000, you must also complete Section B of Form 8283. This section generally requires an appraisal by a qualified appraiser.
For more information on charitable contributions, see Publication 526, Charitable Contributions. For information about noncash contributions, see Publication 561, Determining the Value of Donated Property. Forms and publications are available at IRS.gov or by calling 800-TAX-FORM (800-829-3676).
I frequently receive calls regarding valuation for non-cash charitable donations, so I’d like to address questions from an appraiser’s point of view. I cannot give tax advice, so a consultation with the appropriate professional is recommended.
Prior to accepting the assignment, the appraiser will ask a number of questions:
What do you have to donate? How were the items acquired? Which charity are you donating to and is it a related use? When is the date of donation? Is it a 100% interest and unrestricted donation?
When is an appraisal required?
A Qualified Appraisal is required if an item or group of similar items has a Fair Market Value of $5,000 or more. It is also required if an item is worth $500 or more and is in less than good (e.g. poor) condition. The appraiser will also complete the appropriate sections of IRS Form 8283. The reporting requirements increase as the value of the donation increases.
Which value is used in donation appraisals?
The appropriate level of value for most tangible personal property donations is Fair Market Value defined by the Income Tax Regulations 1.170A-1(c)(2) as,
“The price at which the property would change hands between a willing buyer and a willing seller, neither being under compulsion to buy or sell, and both having reasonable knowledge of all relevant facts.”
Many times this is what the item would sell for in its current used condition at an auction, estate sale, garage sale or wherever the appropriate market is for each item. There are special rules pertaining to business inventory and artist’s donating their own work. These are considered ordinary income properties and the deduction may be limited.
The IRS has established the following requirements:
A Qualified Appraiser has earned a professional designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or has met certain minimum education and experience requirements.
The individual regularly prepares appraisals for which he or she is paid.
The individual demonstrates verifiable education and experience in valuing the type of property being appraised.
The individual has not been prohibited from practicing before the IRS under section 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.
The individual is not an excluded individual.
Choose a 3rd-party independent appraiser that has no connection to the item, donor or donee. For example, the dealer who sold you the item would be an excluded individual.
Can the donor or donee tell the appraiser what values to place on the objects?
Absolutely not. The appraiser must independently arrive at a value through research of current market data. The appraiser is subject to stiff penalties from the IRS if the valuation is too high or too low.
What about the cost for storage, moving, cleaning, installation or maintenance of items donated?
These costs are not part of Fair Market Value and cannot be included on the appraisal. Consider donating money to cover some of these costs.
When does the appraisal need to be completed?
The appraisal should be completed no more than 60 days prior to the donation or anytime after, up to the deadline when the tax return is due.
Is the cost of an appraisal deductible?
The cost of the appraisal may be deductible under IRS Schedule A, Miscellaneous Deductions. Consult your tax professional.
Can the charity pay for the appraisal?
Usually the donor pays for the appraisal. If the donee pays, then the cost of the appraisal should be subtracted from the total amount of the donation.