Estate Appraiser and Appraisal Requirements for Personal Property

Estate Appraiser and Appraisal Requirements for Personal Property

News story posted in Congressional Correspondence on 4 August 2010| comments
audience: National Publication | last updated: 18 May 2011
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Summary

Senate Majority Leader Harry Reid (D-NV) has forwarded to Treasury for review correspondence sent to him by a constituent. The constituent, who is a Certified Personal Property Appraiser, recommends that appraisers and appraisals of personal property for federal estate tax purposes meet the same "qualified" appraiser and appraisal requirements applicable to charitable contributions and that any future estate tax reform proposals include such provisions.

Full Text:

July 12, 2010

The Honorable Michael Mundaca
Assistant Secretary of the Treasury for Tax Policy
U.S. Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, D.C. 20220

Dear Assistant Secretary Mundaca:

Enclosed is a letter from my constituent, * * *, regarding valuations used for estate tax purposes. I would appreciate your reviewing the matter and responding to my constituent's concerns. Please reply to * * * directly and send a copy of your response to me.

Thank you for your cooperation and assistance.

                Sincerely,

                Harry Reid
                United States Senator
                Nevada
HR:ac
* * * * *

May 31, 2020 [sic]

The Honorable Senator Harry Reid
Majority Leader
United States Senate
Washington, D.C.

Re: Personal Property Appraisals

Dear Senator Reid:

I understand the Senate is considering legislation to re-impose the federal estate tax.

I'm a Certified Personal Property Appraiser, having satisfied the rigorous experience, training and testing standards of the International Society of Appraisers and the Appraisal Standards Board.

As I entered this career, I was surprised to learn that no state requires licensing or testing of personal property appraisers. The Yellow Pages are full of ads from appraisers with no qualification other than perhaps a business license. The stories are legion of "appraisers" who both appraise a client's property and then offer to buy it at the appraised value; of "appraisers" who don't even bother with the appraisal, but use the offer of one to gain access to an estate's personal property.

As you know, in 2006, the U.S. Congress included in the Pension Protection Act requirements that the Internal Revenue Service adopt more stringent regulations regarding personal property appraisals conducted for charitable donation filings. The IRS complied and those regulations are contained in Title 26 CFR § 170(f)(11). In part, the rules require that charitable donations valued at more than $5000 must be substantiated by a "qualified appraisal." The "qualified appraisal" is in part defined as one conducted by a "qualified appraiser," or an individual who

  • "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,
  • Regularly performs appraisals for which the individual receives compensation, and
  • Meets such other requirements as may be prescribed by the Secretary in regulations or other guidance."
Additionally, "an individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless:
  • The individual demonstrates verifiable education and experience to valuing the type of property subject to the appraisal, and
  • The individual has not been prohibited from practicing before the Internal Revenue Service by the Secretary under section 3(c) of title 31, United States Code, at any time during the 3-year period ending on the date of the appraisal."
Title 26 CFR relating to the federal estate tax also refers to the definitions of "qualified appraisal" and "qualified appraiser", but stops short of requiring that personal property appraisals conducted for federal estate tax filing be conducted by a "qualified appraiser." Instead 26 CFR § 20.2031.6(d) says that if "expert appraisers are employed, care should be taken to see that they are reputable and of recognized competency to appraise the particular class of property involved."

I'm writing to suggest that in my opinion, it would be in the public interest to require for estate appraisals the same appraiser and appraisal qualifications as are required for charitable donation appraisers and appraisals. Rather than a state by state approach, a requirement in IRS regulations that appraisals conducted for estate tax purposes meet the same requirements as those performed for charitable donation appraisals would serve the public well, in my view.

Any legislation drafted to re-impose the federal estate tax might present an opportunity to accomplish this consumer protection measure.

Thank you for your attention and all you do for the citizens of Nevada and this country.

Sincerely,

* * *

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