What factors are considered in an appraisal?

A qualified appraisal weighs the item's physical condition, market comparables, provenance, and any use restrictions to arrive at a supportable fair market value as of a specific valuation date.

For IRS purposes, particularly noncash charitable contributions reported on Form 8283, the appraisal report has to do more than state a number. It needs to document the reasoning behind that number so the value holds up under review. Our appraisers evaluate several categories of information when preparing a report:

• Description and condition: a detailed account of the item's materials, dimensions, maker, and current physical state, since condition directly affects value.
• Fair market value and valuation date: the price a willing buyer and seller would agree on, tied to the specific date required for the intended use (date of donation, date of death, date of loss).
• Valuation method and basis: the approach used to reach the conclusion, typically comparable sales or other recognized methods, explained clearly enough for a reviewer to follow the logic.
• Provenance and authenticity: especially relevant for fine art, antiques, and collectibles, where ownership history and authentication can significantly move value.
• Market data and comparables: recent sales of similar items, auction results, and dealer pricing that ground the opinion in actual market activity.
• Restrictions on use or sale: any legal or practical limitations on the property that could affect what it would fetch on the open market.

For charitable donations specifically, a personal property appraisal for charitable donation also has to satisfy the appraiser-qualification and reporting requirements built into Form 8283. Every report we prepare is written in accordance with USPAP, so the description, valuation date, methodology, and appraiser credentials are all documented in a way that supports the stated fair market value.

If you're weighing whether your situation calls for a formal appraisal at all, our answer to what are appraisals required for walks through the common triggers.