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American Society of Appraisers Launches New Business Valuation Education Accreditation Series

Herndon, VA, March 9 – The American Society of Appraisers (ASA)’s Business Valuation Committee is pleased to announce the update of their Principles of Valuation (POV) Education Series with a new and improved curriculum. This new curriculum is designed to address current topics which appraisers face. Required coursework to achieve the ASA designation, appraisers can take advantage of these updated courses on their journey towards achieving the preeminent accreditation for appraisers, Accredited Member or Accredited Senior Appraiser. ASA accredited appraisers enjoy a multitude of member benefits, a competitive advantage in the marketplace, and opportunities to further their professional development.

Introduction to Business Valuation – Part 1 (BV201)
This introductory course provides students with an overview of the three basic approaches to valuation as well as an in-depth knowledge of the market approach. Focusing on IRS Revenue Ruling 59-60, the 3-day course includes instruction on how to do company analysis, industry and economic analysis and financial analysis.
April 8-11, 2010 – Annapolis, MD • May 13-16, 2010 – Chicago, IL

Introduction to Business Valuation – Part 2 (BV202)
The 2nd of 4 courses in the Principles of Valuation (POV) series presents the theory and application of the income approach and its various methodologies, as well as the asset-based approach. Basic capitalization models and discounting models are shown in the context of earnings and cash flow measurements, as well as equity and invested capital assignments.
March 18-21, 2010 – Manhattan Beach, CA • June 10-13, 2010 – Manhattan Beach, CA

Business Valuation Case Study (BV203)
This capstone course applies the theory learned in the first two courses in an actual valuation case study. Building upon the concepts learned, students work in groups to analyze the subject company and derive their own opinion of value.
April 8-11, 2010 – Annapolis, MD • June 10-13, 2010 – Manhattan Beach, CA

BV204: Advanced Topics in Business Valuation (BV204)
The final POV course presents experienced appraisers with 5 advanced valuation topics. Current topics include valuation adjustments, issues in the valuation of pass-through entities, valuation in volatile markets, international cost of capital and accounting for intangible value.
May 13-16, 2010 – Chicago, IL

For more information about ASA’s Education Courses, please visit us at www.appraisers.org.

About ASA
The American Society of Appraisers is an international organization of appraisal professionals and others dedicated to the education, development and growth of the appraisal profession. ASA is the oldest and only major organization representing ALL disciplines of appraisal specialists, originating in 1936 and incorporating in 1952. ASA’s headquarters is in the metropolitan Washington, DC area. To find an accredited appraiser near you, visit appraisers.org or call (800)272-8258.
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ASA AND MARSH CELEBRATE COMPLETION OF INTERNATIONAL APPRAISER EDUCATION COURSES

HERNDON, VA — The entire appraisal group of Marsh RVS recently completed the American Society of Appraisers (ASA)’s Machinery and Technical Specialties POV courses (ME201-ME204) at its headquarters in Durban, South Africa. Marsh RVS—an international appraisal firm based in Durban—is a subsidiary of Marsh, the world’s leading insurance broker and risk advisor.

ASA Executive Vice President Jane Grimm commented, “Our strategic relationships with multi-national companies are integral to our goal of enhancing ASA’s international training curriculum. We are impressed with Marsh RVS’s commitment to their employees, and we’re proud to play a central role in the growth and success of their business.”

David Zovitsky, Managing Executive at Marsh RVS, emphasized the positive outcome. “We have been a specialist Insurance valuation practice for 20 years. The material covered in the course has helped to quantify and streamline some of the methods which we use as well as defining our standards.”
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About Marsh
Marsh RVS, an international appraisal firm based in Durban , is a subsidiary of Marsh (Pty) Ltd, the South African branch of Marsh, the world’s leading insurance broker and risk adviser. Marsh is a unit of Marsh & McLennan Companies (MMC), a global professional services firm with approximately 52,000 employees and annual revenue of $11 billion.

For further information, contact Christy Jones, Marketing and Communications Director, ASA, at (703) 733-2124, or via email at cjones@appraisers.org; or David Zovitsky, Managing Executive Marsh Reinertsen Valuation Services at 27 (031) 275 4680, or via email at david.zovitsky@marsh.com.

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New Year’s Resolutions Should Include Review Of Personal Assets

Given the current economic situation, it is clear that maximizing personal assets is important. The American Society of Appraisers suggests that people take the opportunity at the beginning of the new year to resolve to document and assess personal assets.

“The contents of most peoples’ homes are worth tens of thousands of dollars and they don’t even realize it,” said Sharon Ring Rollins, chair of the personal property committee of the American Society of Appraisers.

When people count up their assets, they normally include the value of their home and other real estate, cars, bank accounts, retirement accounts, stocks and bonds, etc. What many people forget, however, is that their personal assets include the contents of their home including artwork, antiques, jewelry, collectibles, etc. The value of those items needs to be considered for estate planning purposes, to ensure that they are properly covered by their homeowners or renters insurance policies in case of a loss, and for sale or charitable donation purposes.

The American Society of Appraisers offers tips for homeowners or renters to get started reviewing their personal assets.

– Documentation. Take an inventory of the items in your house. Open cabinets and closets and document the contents with video or photos. Make lists of what you own, where you got each item, etc., and keep receipts.
– Make note of potentially valuable items. Make a list of items that you think might be especially valuable, including family heirlooms, artwork, and antique furniture.
– Get an appraisal of valuable items. If you think you have valuable items and want to know more about their value, consult an accredited appraiser.
– Review your homeowners or renters policies. These policies have a certain coverage amount for the contents of your home. Do a rough calculation of the value of the contents of your home if you had to replace everything. Does the amount in your currently policy cover it? If not, talk to your insurance agent about raising the limit or get special riders for extremely valuable items. Owning a few pieces or fine art or a few good antiques may mean that the coverage in your policy is less than adequate.

“Appraisals are important documents like wills. They provide proof of the worth of a piece of property,” said Rollins. “An appraisal performed by an accredited appraiser will stand up in court, with the IRS, or the insurance company if need be.”

For more information, to find an accredited appraiser near you, or to learn more about appraisals log on to www.appraisers.org or call 1-800-ASA-VALU.

About ASA
ASA is an international organization of appraisal professionals and others dedicated to the education, development and growth of the appraisal profession. ASA is the oldest and only major organization representing all disciplines of appraisal specialists, originating in 1936 and incorporating in 1952. ASA’s headquarters is in the metropolitan Washington, D.C., area.

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TAX TIPS FOR YEAR-END CHARITABLE GIVING

Even though the economy has put a damper on charitable donations this year, the holiday season is still the time when most people make donations, allowing them to get end of the year tax write-offs.

In the last few years, the IRS has greatly increased its scrutiny of charitable donations so taxpayers need to review the regulations, document donations properly, and get donations appraised by a “qualified appraiser” when required by the tax code.

The IRS requires that a “qualified appraiser” prepare a “qualified appraisal” for individual household items donated to charity which are worth more than $500. This is true also for other donated items such as art and antiques that have a fair market value of more than $5,000. Taxpayers need to attach IRS form 8283 with appraisals. The IRS offers tips for deducting charitable contributions on its Web site.

“The best way to find a ‘qualified appraiser’ is to use an appraiser who is accredited by a ‘recognized professional appraisal organization’ that complies with the Uniform Standards of Professional Appraisal Practice (USPAP),” said Sharon Ring Rollins, an Accredited Senior Appraiser member of the American Society of Appraisers.

Taxpayers should also make sure they are submitting an appraisal that was prepared using the correct valuation method for charitable contributions. All appraisals done for the Internal Revenue Service conclude the fair market value of the item or items. The fair market value is the amount that the item would sell for on the open market at the time of donation. Fair market value takes into account the condition of the piece or pieces, the value of sales of similar properties at the time, and the market for those types of items.

For more information, or to find an accredited appraiser near you or to learn more about appraisals, log on to www.appraisers.org or call 1-800-ASA-VALU.

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American Society of Appraisers Gets New Executive Vice President

The Board of Governors of the American Society of Appraisers has announced that Jane Grimm will become ASA Executive Vice President effective October 1, 2009, succeeding Laurie Saunders. Saunders, who resigned in order to devote more time to her young family, will complete her service as ASA’s Executive Vice President on September 30. Saunders will be serving as a part-time consultant to ASA until November 15.

Grimm, who has served as ASA’s Director of Education and Accreditation since February 2007, brings 19 years of experience in all areas of professional association management. During her time at ASA, she has implemented many time- and money-saving initiatives in the Education Department, changing outdated processes and placing emphasis on customer service. She successfully managed a 100 percent increase in on-site course offerings and held a forum with the University Partners to share successes and challenges. In recognition of her service, staff and leadership voted her the recipient of the 2009 Sylvia Wade Olson Award of Merit.

Within three months of employment at ASA, she assumed responsibility for the accreditation department and its three-member staff. Within six months of employment, she took on the hotel contracting and all logistics for the association’s national course program. She also served as a member of the directors’ team and the liaison for BV and ARM. Educational activities make up 42 percent of ASA’s budget.

Before joining ASA, Grimm served the American Society of Pension Professionals & Actuaries (ASPPA) for nearly 10 years as Chief Programs Officer and Managing Director. During her tenure at ASPPA, her accomplishments included helping the organization achieve an annual membership growth rate of 7-plus percent and a 96 percent retention rate for credentialed members; increasing the attendance at the 401(k) SUMMIT from 500 to 1,600 over a five-year period; collaborating with the IRS and Department of Labor to develop educational conferences; growing association revenue from $3 million to $9 million; automating the exam process through a program with Prometric; putting on 11 conferences a year; and restructuring the organization to simplify processes, eliminate redundancies, and establish clear and measurable goals.

Grimm’s experience includes education development and implementation, membership growth and retention, project management, conference logistics, and writing and editing. She has overseen the relocation of an office, implemented two Web sites and three Web site upgrades, served as project manager for two database implementations and supervised a staff of 27.

In accepting the position, Grimm said, “I believe in building strong collaborative teams of members and staff that work closely together toward a common goal.” She added, “I believe that members should do what only members can do, which is provide content, while fully engaged staff should make things easier on them by performing logistical and project management details.”

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ASA Responds to Treasury Dept. ‘Making Home Affordable’ Program

Released: March 6, 2009

HERNDON, Va. – The nation’s leading professional appraisal organizations (the American Society of Appraisers; the Appraisal Institute; the American Society of Farm Managers and Rural Appraisers and the National Association of Independent Fee Appraisers), representing 35,000 real property appraisers in the U.S., released the following statement in response to today’s release of the underwriting details of the Administration’s “Making Home Affordable” program:

On March 4, the Treasury Department provided the underwriting details of how millions of troubled mortgage loans are to be refinanced or modified under the “Making Home Affordable” program. Our organizations applaud the fact that the plan will allow millions of families to remain in their homes. However, we are deeply troubled that the Treasury Department’s $75 billion government guaranteed modification program fails to protect taxpayers from avoidable losses when reworked loans default in the future, as some of them inevitably will; and fails to protect homeowners from mistakenly being declared ineligible for modification because they are told, erroneously, that the current market values of their homes do not meet plan underwriting criteria. Further, the plan retreats from prudent and long-standing banking regulations that encourage the use of appraisals in loan modifications and refinancings.

Reliable appraisals of the current values of homes are central to the success of the plan: for refinanced loans owned or guaranteed by Fannie Mae and Freddie Mac, homeowners will be declared ineligible for help if their mortgage loan exceeds 105% of the current value of their property. For homeowners seeking loan modification, they will be turned away if the net present value of cash flows expected from modification is less than the cash flows expected from allowing the mortgage to default. The current value of the collateral property is an essential component of establishing net present value. As a matter of good public policy, these critical home valuation decisions should only be made by valuation professionals.

Today, there are 120,000 professional appraisers in the U.S. who are highly trained, tested and supervised by appraiser regulatory agencies in the 50 states and U.S. territories. For reasons we find inexplicable, Treasury’s plan ignores this invaluable “safety and soundness” human resource and, instead, relies on computer generated values and the opinions of real estate agents who are not subject to nationally accepted appraisal qualifications and standards to safeguard taxpayers and determine whether homeowners are or are not eligible to decrease their mortgage burden.

Professional real estate appraisers deliver a diverse menu of valuation services with many designed specifically to address distressed properties and others that can be used for most non-complex transactions. Examples of the types of products that appraisers can deliver for loan modification or distressed asset purchases include:

— Appraisal updates and reviews, or updates to existing appraisals

— Drive-by appraisals, or appraisals of the exterior of the property

— Desktop appraisals, or appraisals performed from the appraiser’s desktop without any exterior or interior inspection

Today’s technology and current methodology allow real estate appraisers to deliver necessary services quickly and securely. Given the advances in technology, these services are very cost effective and affordable with delivery from the thousands of designated, certified, and licensed appraisers in every community in the country.

Treasury should do everything in its power to encourage the use of products prepared by regulated professionals in accordance with industry standards that have the force of law, particularly where there have been material changes in market conditions, as we see in many parts of the country today.

While we recognize that proper underwriting to determine the ability of a prospective borrower to repay a loan is the most critical element in any loan, the current economic crisis has shown the corollary importance of having current, competent measures of current market value of the underlying security, the real property, in the event of economic downturns that could affect a borrower’s ability to repay a loan as well as the probability that the real property value will decline.

However, instead of relying for accurate valuations on the nation’s 120,000 professional appraisers, the Administration’s plan relies on computer-generated Automated Valuation Models (AVMs) and the estimates of real estate agents who are not subject to government mandated and nationally accepted appraisal training and ethical requirements. While we believe the valuation requirements established by Fannie Mae and Freddie Mac (in connection with their new mortgage refinancing program) are far superior to Treasury’s loan modification plan, we also believe that the opinions of professional appraisers provide consumers and taxpayers with the most reliable determinations, by far, of residential home values.

We do not believe that homeowner eligibility for the mortgage relief programs and the protection of taxpayers should be dependent on the market value determinations of “black box” computer programs or any real estate agent who lacks appraisal training required by the federal government and 50 states. Broker price opinions are not overseen by any governmental regulatory authority, and they do not adhere to a uniform set of nationally accepted and tested valuation standards. Further, broker price opinions are provided by individuals who may have an interest in whether a mortgage is refinanced or defaults and the collateral property resold. While we acknowledge that AVMs and BPOs are cheap, they should not be regarded as acceptable alternatives to the conclusions of professional appraisers, who are tested and trained in valuation theory and practice and who are regulated by state appraiser licensing boards. The omission of professional appraisers from the foreclosure prevention plan (most glaringly from Treasury’s loan modification program) is a serious mistake we hope the President or Congress will rectify.

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Reliable Valuations Of Mortgaged Properties Are Key to Success of Administration’s Foreclosure Relief Plan

Released: February 23, 2009

WASHINGTON, D.C. – The nation’s four largest organizations of professional real estate appraisers—the Appraisal Institute, American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and National Association of Independent Fee Appraisers—delivered the second of two letters to Treasury Secretary Timothy Geithner urging the Administration to protect homeowners and taxpayers by requiring that the market values of homes under President’s Obama’s Homeowners Stability Program be determined by professional appraisers who are state certified and licensed.

Current bank agencies guidelines require new appraisals in restructuring loans when a material change in market conditions exists. In the letter, the groups affirm that reliable valuation and appraisal products are available from professional appraisers in every community in the country. There are more than 100,000 certified or licensed real estate appraisers in the United States. Because of new technologies and methodologies, these professionals are prepared to deliver a wide variety of necessary services quickly, including summary and streamlined appraisals that are cost effective and highly reliable.

To ensure that all parties have accurate and reliable information when restructuring loans, the letter cautions against the use of real estate sales people to provide broker price opinions. These individuals have no valuation training, do not observe uniform valuation standards, are accountable to no one for their estimates of home prices and may sometimes have an economic interest in whether loans are modified or defaults occur requiring a resale of the property to another buyer. By contrast, all 50 states license, certify and supervise the work of appraisers; and 23 states specifically prohibit realtors from valuing properties for any mortgage related purpose, including loan modifications. If the Administration’s mortgage relief plan permits the use of broker price opinions to determine the current value of residential properties, it could lead to widespread violations of state laws. The appraisal organizations also warned against the use of automated valuation models (computer-generated values) which do not factor the condition of properties into their market values and are not reliable in declining markets and in areas with diverse housing stock. The groups also cautioned against reliance on national housing indices to determine the market value of individual properties. These indices often contain data many months old, and generally fail to consider foreclosure or short sales in their calculations. Homeowners who might otherwise be eligible for loan modification could be denied a lower cost mortgage because a BPO, AVM or housing index could improperly value their collateral property.

In the letter, Bill Garber, Appraisal Institute Director of Government Affairs and External Relations, said, “Individuals who become state licensed or certified appraisers must meet meaningful requirements involving valuation-specific training, education and experience; and, their conduct is regulated by appraiser licensing agencies in the 50 states and territories. Real estate appraisers can provide a range of services in a loan modification or refinance situations, including streamlined appraisals, under existing standards. For a stable economy and secure mortgage finance system, valuations must be reliable and those performing the appraisals must be accountable and professional.”

The chairman of the American Society of Appraisers’ Government Relations Committee, Jay Fishman, added, “We believe a foreclosure relief program which relies on valuation professionals to establish the market values of properties collateralizing mortgages will benefit homeowners and protect America’s taxpayers who are ‘on the hook’ for losses resulting from the inevitable defaults on some modified mortgages. The safety and soundness of taxpayer guaranteed loans in today’s tumultuous mortgage markets require reliance on professional appraisers, not on part time salespeople and unreliable computer-generated values.”

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Appraisers Recommend Caution When Selling Gold Jewelry for Cash

Released: February 12, 2009

RESTON, Va. — The price of gold is once again selling at near all-time high prices. That combined with tough economic times has many people anxious to take advantage of high prices by selling their gold for scrap. The American Society of Appraisers cautions consumers to learn the ropes before jumping into a gold marketplace that may not offer the best deal.

With gold parties springing up in people’s homes and in hotel ballrooms across the country, and mail-in gold businesses multiplying, it is important for consumers to become educated about the gold market before selling their gold.

“If consumers don’t know what they have and approximately what it is worth,” said Margaret Olsen, Accredited Senior Appraiser of the American Society of Appraisers, “they have absolutely no idea if they are getting a fair value for their gold.”

The American Society of Appraisers offers tips to consumers.

Start by looking for a stamp on the back of the jewelry which lists the karats. 24 karat gold is .999 pure, 18 karat gold is .750 pure, 14 karat gold is .583 pure and 10 karat gold is .417 pure. It is important to note that not all gold jewelry contains the exact purity that is on the stamp. Gold from other countries may be less pure than stamped and older 14 karat jewelry, like that produced in the 1970’s and earlier, may have a purity of 13.5 karats.
Next find out the current prices of gold by looking at Web sites like Kitco.com. The price is quoted per troy ounce. A troy ounce is 31.1 grams. To get the price per gram, divide the daily price of gold by 31.1 grams and you will get the price for a gram of 24 karat gold. Most items are not pure gold so if you have 18, 14, or 10 karat gold it will be worth less.
Ask the jeweler what percentage they take from the sale and what percentage the metal refinery takes and then you will have an idea of what you should be paid.
“It really is a bit complicated for the average person to know exactly what they have to begin with and to do the math to figure out what they should be paid,” said Olsen. “That is why it is really important to deal with a reputable local jeweler with ties to the community.”

Also, take time to assess whether selling gold jewelry for scrap is the best option. Broken or mismatched jewelry are the best candidates to be melted down. However, many pieces have more value when sold whole to an estate jeweler or buyer. Pieces from well known designers, well crafted antique pieces, or pieces with gem stones should be valued because melting them down may not be the best option.

For consumers who want to have a piece of jewelry appraised, they should choose an appraiser who is an accredited member of a nationally recognized appraisal organization, such as the American Society of Appraisers, as well as a Graduate Gemologist of the Gemological Institute of America (GIA) or the Gemmological Association of Great Britain (FGA). For gold coins and bars, ask an accredited gold appraiser or numismatist. Also, ask about an appraiser’s credentials and make sure they are still active.

To find an appraiser or to learn more about appraisals, consumers can log on to www.appraisers.org.

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Appraisal Organizations Oppose Proposed Banking Agencies’ “Appraisal and Evaluation Guidelines”; Urge That They Be Withdrawn and Greatly Strengthened

Released: January 23, 2009

HERNDON, Va.—The American Society of Appraisers (ASA), the American Society of Farm Managers and Rural Appraisers (ASFMRA) and the National Association of Independent Fee Appraisers (NAIFA) have filed written comments with the federal bank regulatory agencies which “strongly object” to the proposed federal Interagency Appraisal and Evaluation Guidelines. The three professional appraisal organizations told the agencies that their proposed collateral valuation requirements “actually weaken, rather than strengthen, the safety and soundness of real estate loans made by regulated institutions”; and, they urged that the proposal be withdrawn so it can be greatly strengthened.

The proposed guidelines establish when a professional appraisal is required in connection with mortgage and other loans collateralized by real estate (Title XI of the federal Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) of 1989 established the basic requirement for the use of professional appraisers in certain federally-related transactions). ASA, ASFMRA and NAIFA were specifically critical of the fact that the Guidelines exempt a dozen categories of real estate lending transactions from the Title XI requirements; and, permit the use of “untested and unreliable alternatives to appraisals (i.e., automated valuation models; broker price opinions; and, property tax assessment valuations) to substitute for the opinions of individuals who have been Certified and Licensed as appraisal professionals by the 50 states and territories.

“We believe the approach to valuation issues reflected in the Guidelines is fundamentally flawed; and is inconsistent with the bank regulatory safety and soundness reforms promised by the incoming [Obama] Administration,” the joint letter states. The three professional appraisal organizations also commented that while they would oppose the Guidelines even during “normal” times, the banking agencies’ preoccupation with exempting lenders from professional valuation requirements was “particularly troubling” coming at a time when there is enormous stress on the banking system and mortgage markets, when the real estate markets are in an extreme state of flux and when the government’s loan modification programs for troubled mortgages, are so dependent on accurate valuations of collateral properties.

The three organizations concluded by stating that because of the “many exceptions to and exemptions from reliance on professional appraisals,” the Guidelines are a regulatory “step backwards” that causes us to oppose them

The comments were delivered to the Office of the Comptroller of the Currency, the Federal Reserve System, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration.

To view the complete contents of the Jan. 20, 2009, comment letter, click here.
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Avoid IRS Scrutiny with Proper Year-End Tax Deduction Planning

Released: November 26, 2008

HERNDON, Va. — Historical indications tell us, says the Center on Philanthropy at Indiana University, that despite the dismal economy this holiday season, a majority of people will still make charitable contributions. Charity Navigator notes that 50 percent of all charitable giving is done between Thanksgiving and New Year’s Eve.

“This year in particular is a great time to donate art before the prices fall further,” said Elin Lake-Ewald, an Accredited Senior Appraiser with the American Society of Appraisers. “Auction prices are just beginning to fall and it looks they will continue to sink in the coming year, so to maximize the tax deduction, it is a good idea to think about donating art now instead of waiting another year or two.”

In the last few years, the IRS has greatly increased their scrutiny of charitable donations so taxpayers need to review the regulations, document donations properly, and get donations appraised by a “qualified appraiser” when required by the tax code.

The IRS is now requiring that a “qualified appraiser” prepare a “qualified appraisal” for individual household items donated to charity which are worth more than $500. This is true also for other donated items such as art and antiques that have a fair market value of more than $5,000. The difference this year, notes the American Society of Appraisers, is that provisions of the Pension Protect Act, which was signed into law in August 2006, require that these appraisals be done by a “qualified appraiser.”

“The best way to find a ‘qualified appraiser’ is to use an appraiser who is accredited by a ‘recognized professional appraisal organization’ that complies with the Uniform Standards of Professional Appraisal Practice (USPAP),” said Susan Golashovsky, a Senior Accredited Appraiser member of the American Society of Appraisers.

Taxpayers should also make sure they are submitting an appraisal that was prepared using the correct valuation method for charitable contributions. All appraisals done for the Internal Revenue Service conclude the fair market value of the item or items. The fair market value is the amount that the item would sell for on the open market at the time of donation. Fair market value takes into account the condition of the piece or pieces, the value of sales of similar properties at the time, and the market for those types of items.

For more information, or to find an accredited appraiser near you or to learn more about appraisals, log on to www.appraisers.org or call (800) ASA-VALU.

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