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

 

 

 

ESTATE / LIFE PLANNING APPRAISALS

There are many times in a person’s life when they need to make plans regarding their collections and other personal property:

1) Estate planning

2) Downsizing

3) Distribution to family members

4) Donation

5) Tax planning

An essential part of this process is to have your collection appraised so that you can find out current values and make informed decisions.  The appropriate level of value is Fair Market Value.

Remember, it’s important to choose a qualified appraiser with a designation from a professional appraisal society.

It’s about planning for life’s important moments, and the future of your treasured collections and family heirlooms.

 

 

Charitable Donation Appraisal – FAQs

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.

Who is a Qualified Appraiser?

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.

RESOURCES:

“To Give and To Receive – A Handbook on Gifts and Donations for Museums and Donors”

Guidestar

Planned Giving Design Center

IRS – Tax Information for Contributors

 

Personal Property Appraisals for tax deductions in Southern California
Personal Property Appraisals for tax deductions in Southern California

 

 

 

 

 

 

 

Collecting the Olympics

The fanfare, emotion and sports competition of the 2012 Olympics has passed.  Many collectors have found a way to extend the excitement year round by collecting Olympic memorabilia.  

You can start out inexpensively by collecting pins, coins, stamps and mascots from recent years.   Some collectors progress to a higher, more expensive level including medals and torches.  There’s something for every interest and budget.  To narrow down the choices begin collecting by category, year, country or sport.     

I have a modest Olympic collection of my own, and display many items in my office.  It started off when I worked at the 1984 Olympics in Los Angeles.   I was stationed at the USC Olympic Village where I was able to trade pins with the athletes and collect small souvenirs.  Over the years, I have added items from other olympics to my collection.  However, I realized that the pins I collected directly from the athletes in Los Angeles mean the most to me because of their personal connection.     

As an appraiser, one of the most exciting opportunities I’ve had was to appraise a silver award medal owned by an olympic athlete.   It was an insurance appraisal and it gave me the opportunity to examine the sales comparison approach (what similar items have sold for) versus the cost to reproduce the medal.   

If you still want a unique souvenir from the London Olympics, you can purchase something at the Official London 2012 Auction website.   They are auctioning off everything from game used equipment, to ceremony props and torches to help defer the cost of putting on the games.   

 

Appraiser of Olympics Memorabilia in California
Appraiser of Olympics Memorabilia in California

 

RESOURCES

Official website of the Olympic Movement

Olympic Collectibles and Collecting Olympic Memorabilia

Ingrid O’Neil Sports & Olympic Memorabilia

Olympin  – Olympic Collectors Club

Olympic Games Memorabilia and Collectibles

Top 10 Most Expensive Items of Olympic Memorabilia

 

 

Estate and Probate Appraisals

There are many situations when an appraisal of personal property is needed for estates.  If someone calls and says “I need an estate appraisal”, a few additional questions should be answered so the proper service can be provided.  Depending on the circumstances, they may need an appraisal of the entire residential contents or just a specific list of items.  The intended use of the appraisal will guide us in the right direction:

ESTATE TAX:  Required by the Internal Revenue Service and many states.  If the total estate is over a certain value threshold (currently at $5 million), then everything needs to be appraised and valued as of the date of death (or alternate date).   The IRS requires a room by room inventory of the complete residential contents.  Items of low value under $100 Fair Market Value can be grouped together with similar items.   Many states follow the Federal level, however several states have a much lower threshold requiring an appraisal.

EQUITABLE DISTRIBUTION: To divide up items from the estate equally among the heirs.   This may require an appraisal of the total contents or a specific list of items, depending on the needs of the estate and the heirs.

ESTABLISH A BASIS: Valuing assets or a collection at a specific point in time can provide a benchmark so that the basis can be stepped up to the current value as of the date of death.  It can provide a comparison at a later time to illustrate growth or decline in value.

PROBATE:   The probate court will require an inventory and appraisal of the estate assets.  

TRUST INVENTORY: In California, the majority of estates are part of an established trust.   An inventory and appraisal establishes the value of the property at the time it became subject to the trust.

ESTATE PLANNING:  Planning for the future of an estate or collection is also important.  An appraisal can provide a valuable tool so that owners can plan in advance for tax, distribution or donation.  It can provide peace of mind for collectors to know how their treasured objects will be handled after they are gone.

In California, the appropriate level of value for each of these situations is Fair Market Value:

Fair Market Value is set forth in IRS Treasury Regulation 20.2031-1 which states that, “The Fair Market Value is 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 relevant facts.

The Fair Market Value of a particular item of property includible in a 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 an item in a market other than that in which such an item is most commonly sold to the public, taking into account the location of the item wherever appropriate.”

As an appraiser I cannot give legal or tax advice, so a consultation with the appropriate professional is recommended.

Choosing an appraiser that is impartial (not interested in buying or selling the estate),  credentialed, USPAP compliant and IRS qualified is very important.   It’s also recommended to hire an appraiser who is knowledgable about regional values and state laws including the correct wording for the document.

Personal Property Appraisals for estate Planning in Southern California
Personal Property Appraisals for estate Planning in Southern California

RESOURCES:

IRS: Estate Tax

California Probate Code

California Courts: Wills, Estates and Probate

State Bar of California: Do I Need Estate Planning?

 

50th Anniversary of American Studio Glass

2012 marks the 50th anniversary of the American studio glass movement.  To celebrate this occasion, over 165 museums, universities and arts organizations throughout the U.S. are presenting exhibitions or programs relating to contemporary glass.  The movement began at the  Toledo Museum of Art:

In 1962, the Studio Glass Movement was born in a garage on the Museum grounds. Harvey Littleton, a pottery instructor, received the support of then-director Otto Wittmann to conduct a workshop to explore ways artists might create works from molten glass in their own studios, rather than in factories. A prototype “studio” furnace was built in the TMA garage, but for the first three days of the workshop all attempts to fuse molten glass failed. Finally, Dominick Labino, then vice president and director of research at Johns Manville Fiber Glass, showed up with advice on furnace construction, and with glass marbles that melted. Harvey Leafgreen, a retired glassblower from Libbey Glass, was then able to demonstrate his craft. Later that summer, many participants returned for a second workshop.

As an appraiser specializing in art glass, I am always looking for opportunities to view art glass and gain education.  Last Fall I attended the Sculpture Objects and Functional Art (SOFA) Show in Chicago.  I enjoyed the opportunity to view contemporary art glass and meet many artists, including Lino Tagliapietra.

The Art Alliance for Contemporary Glass (of which I am a member)  has a calendar of events and celebrations for 2012 at http://contempglass.org/2012-celebration/events.    While you’re at the website, check out “A Visual History of Glass” and “Featured Glass Art Videos”.

Pile Up by Harvey Littleton
Pile Up Harvey K. Littleton (American, b. 1922) United States, Spruce Pine, North Carolina, 1979 Kiln-formed glass, cut glass base

The Glass Art Society is having their annual conference from June 13-16, 2012 in Toledo, Ohio, the birthplace of studio glass.

The Corning Museum of Glass is having their annual seminar on glass October 18-20 titled “Celebrating 50 Years of American Studio Glass” in conjunction with exhibits featuring Harvey Littleton and Dominick Labino, founders of the studio glass movement.

If you have a chance, I encourage you to attend some of the programs and special exhibits celebrating the studio glass movement this year.  It is a rare opportunity to view such a large amount and wide variety of contemporary art glass.

Gold and Green Implied Movement by Harvey Littleton
Gold and Green Implied Movement Harvey K. Littleton (American, b. 1922) United States, Spruce Pine, North Carolina, 1987 Hot-worked barium/potassium glass with multiple cased overlays of colorless and Kugler colors, cut Assembled (six elements)

 

Images used with permission, courtesy of the Art Alliance for Contemporary Glass.