FBI Warns Dealers, Collectors About Terrorist Loot

On Aug. 26th the following announcement was made:

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.

In a single-page document titled ISIL Antiquities Trafficking, the FBI asks leaders in the field to disseminate the following message:

  • 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?

Check stolen object databases.  Proceed with caution.  For the full article and links to important resources:  ISIL and Antiquities Trafficking

Three Major Appraisal Organizations Unite to Alert the Public to Risks Associated with Engaging Uncredentialed Personal Property Appraisals

Circle of Trust

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.

 

  

7 Best Practices for Gifting Art to Museums

Appraisals for Charitable Deductions in Southern California

 

Investment News has a good article titled “The Art of Legacy Planning – 7 Best Practices for Gifting Art to Museums”.  In the article they state that high net worth individuals spend an average of 17% of their wealth on art and antiques, a passion investment.   Part of managing this investment is planning for the future of the collection.  One option is to donate to a non-profit organization such as a museum.  To maximize the benefit from a donation these steps are suggested:

1. Create a plan with your client, legal counsel and an independent art adviser that includes the donor’s close family or other heirs as appropriate. Including family and/or heirs in the process can help clarify a donor’s intent, prevent future conflict and actively aid in preserving the donor’s legacy. The plan should include having the artwork professionally appraised by an accredited appraiser with relevant experience in the type of artwork being donated. The appraisal cannot be made earlier than 60 days before the donation. In cases where donors are concerned about whether the IRS may accept a valuation, such as when there are fluctuating markets for similar artwork, an IRS Statement of Value may be obtained for artwork valued at $50,000 or more to provide the donor with certainty.

2. Try to place artwork in museums that have missions and continuing collection interests that strongly align with your clients’ intent and contents of their collection. Clients often will know of strong prospects. But clients focused and passionate about their collection may not recognize how their collection will best fit with a museum’s broader collection, its goals and its limitations in space and other resources.

3. Consider art museum policies and practices for donors and “deaccessioning” (removing items from museum holdings, usually to sell them). Mr. Welch pointed out that “many museums want to retain the ability to improve their collections through the acquisition of better examples. In such a case, a gifted artwork might be deaccessioned and the proceeds used to acquire a superior work. When that happens, the donor’s name of the original gift typically appears in the newly acquired work’s credit line.”

4. Consider museums that are members of monitoring or regulating associations. For example, the Association of Art Museum Directors requires a written policy for “deaccession principles, procedures and processes”. They also require that “funds received from the disposal of a deaccessioned work shall not be used for operations or capital expenses. Such funds, including any earnings and appreciation thereon, may be used only for the acquisition of works in a manner consistent with the museum’s policy on the use of restricted acquisition funds. In order to account properly for their use, AAMD recommends that such funds, including any earnings and appreciation, be tracked separate from other acquisition funds.”

5. Check the health of organizational finances by looking at Form 990 tax filings and/or charity rating agencies like Charity Navigator. One quick test is to look at total assets and total liabilities. Stable charities — like stable businesses — generally have assets exceeding liabilities.

6. Consider supporting museum operating costs as part of a donor’s commitment to their gift of artwork. Financially supporting the museum is another way of helping to preserve a donor’s legacy and a logical step in a client’s charitable, financial and tax planning.

7. As you draft an agreement for the gift, consider including a “statement of intent” that clearly and personally outlines the desires and expectations of the donor for their donation. Sharing this statement with family (and/or other heirs) and the beneficiary museum can help clarify intent, expectations and address any concerns of heirs or the museum. A statement of intent can also clarify donor intent for future generations and may help prevent legal challenges. Donors who bequeath their art collections to museums share an intimate part of their lives. Advisers can help provide guidance that will preserve and protect their client’s wishes, smooth the process and help establish their client’s legacy for the benefit of future generations.

Source: Investment News The first item on the list includes having your artwork professionally appraised by an accredited appraiser.  Credentials for qualified personal property appraisers are earned with their professional appraisal societies.

About the Author: 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.

Untying the Knot

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.

Resources:

What Should I Know about Divorce and Custody?” from the State Bar of California

Divorce or Separation from the Judicial Branch of California Courts

 

About the Author:

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.

 

HOW OLD IS AN ANTIQUE?

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”.   

RESOURCES:

“Shopping For Antiques” from the Federal Trade Commission.

“Works of Art, Collector’s Pieces, Antiques, and Other Cultural Property” from U.S. Customs and Border  Protection at the U.S. Department of Homeland Security.

 

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.

How to Ship Antiques Safely

antiquedresserA dresser owned by a queen. A teapot once used by your great, great grandmother. When we ship antiques, we’re not just moving around things; we’re shipping history from here to there.

We care that antiques remain preserved. We want them to continue to convey the past in a way that enriches the present. A broken object seldom does that in the same way. As such, every antiques shipment is all about the extra steps. What follows are some tips to help ensure that your objects and their histories arrive intact.

Ahead of Time: Preparing to Ship Antiques 

While packing and shipping a Christmas present or care package yourself is fine, doing the same for an antique or priceless family heirloom is not. This job is best left to the professionals. A knowledgeable antiques shipping company can assess the needs of your item and properly handle it from start to finish.

After taking the first step to hire a reputable packing and shipping company, you should take a look at the different insurance policies the company offers. It’s the claim you never want to file, but part of shipping antiques is also about insuring. You want a solid and well-documented appraisal of the objects before they go. Some companies even offer specialized staff to simplify this process. This tends to mean that your shipper has lots of experience with antique-specific tasks.

 Shipping: Containers and Packing for Antiques

There are some steps that you want to see your shipper make when packing up your piece. The following shortlist can help you identify best practices.

Prepping the Object: Packing antiques is often about securing fragile and moving parts. If your shipper can safely remove any doors, handles, glass panels or other delicate parts, they should. Each item should then be packed separately and clearly labeled.

Shell Materials: Depending on what you are shipping, double wall cardboard boxes may be the best material of choice. Your shipper should insulate your antique with bubble wrap and foamcore pieces within one container and then place that shell within a second layer of cushion and a second box. Other kinds of objects will do better in plastic hard-shell structures, or they’ll require a custom-built wooden crate. Be certain that the shipper you choose can provide these important custom packaging options.

Adhesives: Securing components against independent motion? Antiques shipping experts say “no” when it comes to adhesive tape. The company should use string and ropes instead. Better yet, hold down parts that could be damaged with shrink wrap.

Finally, before your packed antiques go out the door, double check that every crate and box is accurately and very legibly labeled. Be sure that your packing carries the proper precautions: Fragile. Do not load or stack. This side up.

With these steps complete, your antiques are in good shape to arrive intact, and the process will become just another part of their ongoing story – a new chapter with many more to come.

antique stove
-James O’Brien’s work can be found at Mashable, OPEN Forum, Forbes.com, TheAtlantic.com, and elsewhere. He writes about media, finance, business, travel, and tech.

 This article was prepared for Antique and Personal Property Appraisals on behalf of Craters and Freighters.

 

Are Your Prized Possessions Protected?

Insurer USAA posted an article titled “Are Your Prized Possessions Protected?” explaining the basics of homeowners insurance coverage and when valuable personal property insurance might be needed.   Antiques, fine art, silver, jewelry and several additional items can be covered under a specialized policy.   Included in the article is a list of steps to follow to get the most protection:

  • Check your current coverage. Before getting an additional policy, review your homeowners or renters policy and fully understand what the policy covers and what it doesn’t.
  • Update the appraisals. Keep appraisals current (at least every five years), and notify your insurance company if the value changes. Appraisals should be done by a certified professional appraiser with expertise and credentials in the type of item you are insuring.
  • Keep all documentation. Proof of ownership is required when you report a loss, so the more paperwork you have — receipts, appraisals, financing statements, and repair or cleaning bills — the easier it will be if you have to make a claim.
  • Details matter. Provide your insurance company with a full description of each item. For example, if you are insuring a diamond ring, you want to list the cut, clarity, carat, color, number and measurements of the diamonds, and the type of gold — the more detail the better.
  • Do your part. Keep your valuable possessions properly cleaned, maintained and safely stored to avoid damage, loss and theft.

 

An important part of special coverage is to have your valuable items appraised by a qualified appraiser, and updated every 5 years.

Source: USAA website

Nine Tips on Deducting Charitable Contributions from the IRS

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.

 

 

IRS Tax Tip 2013-45, April 1, 2013

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.

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. Fair market value is generally the price at which someone can sell the property.
  6. 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.
  7. 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.
  8. 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.
  9. 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).

Source: IRS website