By Margaret Olsen, ASA

The IRS has changed the rules.

It is imperative that all appraisers, donors, CPAs, accountants, tax attorneys, estate lawyers and anyone involved with charitable contributions and estate tax become aware of the changes and all the implications of the new IRS regulations.

If a donor chooses unwisely, and an appraiser is found to be unqualified, the appraisal that was submitted by the unqualified appraiser also becomes an unqualified appraisal. The donor could lose his or her entire charitable contribution deduction. Any questions regarding the qualifications of the appraiser may be raised on audit (after the tax report due date). Therefore, there is no second chance for the donor. Reg 1.170 A-13(c)(3)(i)(A).

The Pension Protection Act of 2006, signed on Aug. 17, 2006, increased the requirements of a “Qualified Appraiser” in charitable contributions. The new requirements are set forth in IRS Publication 561. April 2007. The IRS significantly expanded its definition of a “Qualified Appraiser” for returns filed after Feb. 16, 2007. Now a “Qualified Appraiser” is an individual who meets all of the following requirements:

  1. The appraiser must have:
    Earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or,
    Met certain minimum education and experience requirements

For personal property, this includes:

  1. Successful completion of college or professional-level course work that is relevant to the property being valued, and
  2. Must have at least two years of experience in the trade or business of buying, selling or valuing the type of property being valued, and
  3. Must fully describe in the appraisal his or her qualifying education and experience.
  1. The appraiser must regularly perform appraisals for which the appraiser receives compensation, and
  2. The appraiser must demonstrate verifiable education and experience in valuing the type of property being appraised.
    To do this, the appraiser can make a declaration in the appraisal that, because of his or her background, experience, education and membership in professional associations, he or she is qualified to make appraisals of the type of property being valued.
  3. 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 past three-year period ending on the date of the appraisal.
  4. The individual is not an excluded individual.

When the donor has a wide variety of objects, more than one qualified appraiser may be required to submit an appraisal report. More than one appraiser may appraise the property, provided that each appraiser complies with the requirements, including signing the qualified appraisal report and Form 8283, Section B, Part III.
There is now an additional requirement to the Appraiser Declaration. Each “Qualified Appraiser” is required to provide and appraiser’s declaration contained in the appraisal, which must now include a statement that the appraiser understands that a Substantial and Gross Overstatement of Valuation resulting from an appraisal that the appraiser knows is for tax purposes may be subject ot a penalty.

Margaret Olsen, ASAS, holds designations in Personal Property-Sports Collectibles and Memorabilia and Numismatics. She maintains her practice at Westminster, Colorado, and is a frequent instructor with ASA’s University Partners.








Nelson O. Clayton is an Accredited Senior Appraiser of the American Society of Appraisers. He is designated in Personal Property Residential Contents-General and Antiques and Decorative Arts. He is also a Certified Appraiser of Personal Property of the International Society of Appraisers, Inc., approved to appraise Antiques and Residential Contents. He is actively engaged in the appraisal of household contents, and antiques and decorative arts and he is building his credentials in silver, and fine arts. With consultation with experts, he has appraised paintings and sculpture in the appraised range of $10-$550,000, individual items of silver in the $40,000 range, clocks in the $30,000 range, and furniture in the $125,000 range. His training at the Winterthur Museum helped him to develop these skills. In addition, he is trained in research and analysis, first as a senior bank-lending officer, and second, as an appraiser. In every assignment, Mr. Clayton continues to develop his skills by identifying and analyzing complete household contents, collections, and family heirlooms. Mr. Clayton’s appraisal business has been developed through personal referral and direct contact with families requiring appraisal of their household contents, primarily for estate tax planning and settlement, donations, divorce and insurance purposes. He has evaluated complete household contents as well as selected individual items.