Many people may have not had much experience with appraisals. Common feelings at the IRS is the appraisals are "crap", and they are willing to go after inadequate appraisals. Concise statement on the agency's part. Here are a few factors to keep in mind to secure a reliable appraisal:
- provide a detailed description of the method used to determine fair market value;
- appraiser should be qualified and actively appraising properties or available to do so;
- appraiser should be objective;
- appraisal should include date of transfer, date of appraisal, a description of the property, description of the appraisal process, state assumption or limiting conditions, and the rationale for methods used.
Thanks to R. Chistian Davis, Vice President, Private Client Group, US Bank, Madison, Wisconsin, for discussing this information at the 45th Annual CLEW Tax Workshop, presented by the University of Wisconsin Law School.
Remember, a blog is for discussion, and is not a substitute for legal or tax advice. Please consult your attorney and or tax person for advice specific to your situation.