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Tax appraisals

  • 1.  Tax appraisals

    Posted 06-17-2018 10:10
    I have a request for a tax appraisal (good piano, legit donation). What do I need to do to inform myself on the minutia and procedures necessary to do a tax appraisal correctly. Setting a value is not an issue for me, but I am not up on what the IRS wants in terms of paperwork...that is, if they actually know what they want after the insane tax revision last year.

    Any expertise on this?


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    Jim Ialeggio
    grandpianosolutions.com
    Shirley, MA
    978 425-9026
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  • 2.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-17-2018 10:49
    Hi Jim:
    A search for advice regarding documentation of charitable contributions has led me to this IRS document. It contains notices regarding different issues, so it's not necessary to read the whole thing. Scan down the page to read the notice on 2006-96. Click on that and you'll find the section on charitable contributions, who is a qualified appraiser and what a qualified appraisal must contain. Here is the first paragraph which explains what I think you're looking for:

    "This notice provides transitional guidance relating to the new definitions of “qualified appraisal” and “qualified appraiser” in § 170(f)(11) of the Internal Revenue Code, and new § 6695A of the Code regarding substantial or gross valuation misstatements, as added by § 1219 of the Pension Protection Act of 2006, Pub. L. No. 109-280, 120 Stat. 780 (2006) (the “PPA”)."

    The rules regarding documention of charitable donations above $5000, and qualifications of an appraiser are given in this IRS document. As it is stated in there, the rules are being drafted and are in flux, so this is to help during the transition time until the law is fully structured and implemented.

    I hope this helps.
    Paul McCloud
    San Diego


    ___________________________________________________________________


    I have a request for a tax appraisal (good piano, legit donation). What do I need to do to inform myself on the minutia and procedures necessary to do a tax appraisal correctly. Setting a value is not an issue for me, but I am not up on what the IRS wants in terms of paperwork...that is, if they actually know what they want after the insane tax revision last year.

    Any expertise on this?


    ------------------------------
    Jim Ialeggio
    grandpianosolutions.com
    Shirley, MA
    978 425-9026





  • 3.  RE: Tax appraisals

    Posted 06-17-2018 18:01
    Search the archives, there was this discussion a few months back. If the value is over $5K, you'll need a certified appraiser. I used a guy from NY, I think he advertises in the PTJ. Digital photos might not de allowed as thay can be photoshopped.

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    Regards,

    Jon Page
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  • 4.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-18-2018 08:35
      |   view attached
    Jim,
    After researching the IRS requirements a couple years ago I came up with the attached document specific for piano donation with the information IRS wants.  In addition to it, the organization receiving the donation will likely have you fill out an IRS Form 8283 that they should supply.  Here's a blank copy.

    Gary Bruce
    Registered Piano Technician



    Attachment(s)



  • 5.  RE: Tax appraisals

    Posted 06-26-2018 11:03
    I asked my tax accountant, who is a fairly aggressive "what does the law actually say" type, about the "who can do an IRS appraisal" question. He came back with a non-ambiguous response as to who may legally perform an appraisal to be used as a tax deduction.  The answer is not us.    

    ...all the rules, especially regarding the appraiser, have very strict requirements. I see NO exceptions; in fact the appraiser is supposed to be a complete independent 3rd party, in the public business of appraisals for a living. He has to sign the IRS form with tax ID. Qualifications include:
    1. Must have earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing any type of property being appraised., or has met minimum experience and education requirements.
    2. Must regularly perform appraisals for which he or she is compensated
    3. Can demonstrate verifiable education and experience in valuing the type of property subject to appraisal.
    4. Is not an excluded individual
    5. Specify which method used and why.
    6. Appraisal amount and date
    7. Specific basis used for the valuation.

    Thus, a piano person is not a certified appraiser, and cannot be unless that's all you do and have credentials.

    I'm providing Leon Holder with pictures, my assessment of condition, my opinion about fair market value. He's doing all the paperwork, and sending it to the client directly. I'm paying Leon directly, having been paid my fee and his fee from the client. The fee he's charging me is significantly discounted from the fee he would charge a direct retail client, so the client going directly to him isnot a savings to the client. I could post his fee, but there is probably some reason not to do that. PM if you are interested.

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    Jim Ialeggio
    grandpianosolutions.com
    Shirley, MA
    978 425-9026
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  • 6.  RE: Tax appraisals

    Member
    Posted 06-26-2018 11:22
    his response is on the money. the irs has gotten extremely aggressive and cracked down on bogus appraisals. people abused the system for things like car donations, clothing donations and inflated the worth so they could write it off. i have always taken the approach that you just took . i help facilitate the appraisal by helping answer questions on the forms, taking pictures etc but the actual paperwork and value is done by a certified piano appraiser that meets or exceeds all of the requirements. mrs jones may not like the fact that her poorly maintained, verdigris loaded Steinway & Sons is only worth a few thousand and needs a rebuild and its not worth the $25-$30 k she sees on e-bay for the same year and model.

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    James Kelly
    Pawleys Island SC
    843-325-4357
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  • 7.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-26-2018 13:35
    Jim

    Several years ago I investigated this appraising method thoroughly, and came up with the same conclusion. I've been using Leo ever since.

    There are some PTG members who think they are "qualified" to perform legal appraisals. They are not. Yes, most of us have the technical knowledge and the experience in evaluating a piano. But what we lack is the way to write the appraisal in the "legalize" method the IRA requires. That is what Leo has learned how to do. He uses my information, but he does the "dirty" work.

    By the same token, even though insurance companies are not required  to follow IRS requirements, basically, if you don't play by their rules, the insurance company will deny a claim. Therefore, it is to your benefit, and the benefit of your client, to have someone like Leo do a insurance claim, too.  I just had him do an official appraisal of a Steinway B that was being shipped from Hawaii to Singapore. I could have given the appraisal, but because the instrument was being shipped overseas, the customer opted to have the appraisal done right.

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    Willem "Wim" Blees, RPT
    Mililani, HI 96789
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  • 8.  RE: Tax appraisals

    Posted 06-27-2018 11:06
    ooops...make that Leopold Holder, not Leon.    


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    Jim Ialeggio
    grandpianosolutions.com
    Shirley, MA
    978 425-9026
    ------------------------------



  • 9.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-27-2018 14:41
    I have been involved in two or three official appraisals. What I learned was that, as a tech, I cannot be directly involved as it could be considered bias. What I can do is recommend to the customer who to call to do the official appraisal. If I have a relationship with that appraiser then there's a good chance I will be called to do the hands on documentation of the piano. That means takings eight or ten very specific pics, doing a preliminary evaluation of current condition and remarking on current pitch, problems, finish and work that might be recommended. I am not otherwise supposed to even touch the piano. That's all. I fill out a form that gets sent back to the appraiser who then fills out a bunch of paper work. However, again because of the possibility of bias, the appraiser does not make the judgement call on the actual value of the instrument. The appraiser will usually contact a well known dealer for that brand, give them all the info, and then asks them for a value judgement. With that in hand, the appraiser then completes the paperwork and submits it to whoever is supposed to get it. Appraisals are only insurance or IRS required if the presumed value of the instrument is $5K or more. Under that, they pretty much don't care.

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    Geoff Sykes, RPT
    Los Angeles CA
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  • 10.  RE: Tax appraisals

    Posted 06-28-2018 05:58
    All this input leads me to really wonder who it might have been that came up with the estimated value of $24K to $30K for the Stieff square grand in the recent "Money Pit Mansion" thread. The piano appears to be a typical old derelict square sitting in a very old abandoned house in central Florida. IMHO its value is likely more closely related to the cost of its removal and disposal.

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    Terry Farrell
    Farrell Piano Service, Inc.
    Brandon, Florida
    terry@farrellpiano.com
    813-684-3505
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  • 11.  RE: Tax appraisals

    Posted 06-28-2018 06:50
    I had Mr. holder appraise a donation after I sent photos and description.
    Before the appraisal can be generated for a charitable donation, you need to have a donee.

    Another thing I received from the owner:
    The way the accountant put it is:
        "acknowledgement from the church [organization name] as to their
         receiving the piano . . .  it should include a notation that they expect to
         use it rather than sell it immediately."  It should also contain the date on
         on which the piano was accepted for the organization.


    Information for Leopold Holder:

    New York Piano Center Inc.

    cell 646.637.2266

    mailto:Leoholder3@yahoo.com

    Send an e-mail, he will reply with his cover letter as to the specifics of the appraisal.



    ------------------------------
    Regards,

    Jon Page
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  • 12.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-28-2018 08:01
    Jim & Wim,
    I think that using someone like Leopold is a good call.  I find it interesting though that (I guess in our day and time) there is a presumption of bias due to so much of it in our culture.  I do see however some ambiguity in the IRS list of credentials that give some leeway for guys like us:  " or has met minimum experience and education requirements" and the word "regularly".  Those are not well defined.  I'm not suggesting anyone do anything they're not comfortable with, but I'm also rogue enough to be offended by regulations imposed in areas like this.  If we're talking about some sort of historic or antique instrument value or an unknown origin that I'm not able to specify I would probably pass on the job and refer to someone like Leopold.

    Geoff,
    I find it interesting that you would do all the actual inspection, then the appraiser gets a dealer to give him value.  It's just a matter of who signs the documents that might satisfy the IRS or insurance company even though you could have arrived at the same information.  Not being critical of you at all, just the system that creates validity based on "credentials" granted when the outcome could be exactly the same.  Again, the presumption of bias is what still annoys me, even though I know there has been so much abuse in the past.  

    I appreciate you all.





  • 13.  RE: Tax appraisals

    Posted 06-28-2018 11:19
    Gary,

    I agree with you. I chafe at the level of bullshit worked into this requirement....and therefore am not a good candidate to push papers like this. I will avoid appraisals in the future. Not to mention, that having done all the leg work, having thoroughly assessed the condition, having the trust of the clients, having hired and paid the appraiser, I then am told by the appraiser that I have no right to see the appraisal, unless the client chooses to give it to me. 

    I see the rules as an attempt to avoid corrupt appraisals. However, as defined, the only people who would recoup enough in tax deductions to justify shelling out for this kind of two handed paper pushing, are top bracket 1%'rs. Even so, I'm not sure where Schedule A stands these days, as to what benefit the appraisal actually buys a client even in that top tax bracket. 

    This was a one shot deal for me.

    ------------------------------
    Jim Ialeggio
    grandpianosolutions.com
    Shirley, MA
    978 425-9026
    ------------------------------



  • 14.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-28-2018 11:51
    I have an occasional client who has attained certification as an "appraiser". He call me to discuss values of pianos when he is hired to "value" one!

    Absurdity is nearly certain when the actions of the people (such as inflating the values of "donations" or even more so the special interests that influence Congress) with the result the resulting corrective law will contain absurdities.

    It behooves the people to attempt to solve problems at the grass roots. However, when we do require collective action, a tremendous amount of due diligence must be applied from the people to achieve the proper policy. What is that old saying? Dying is easy, governance is difficult? Something like that!

    STUMBLE ONWARD THROUGH THE FOG!

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    Edward McMorrow
    Edmonds WA
    425-299-3431
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  • 15.  RE: Tax appraisals

    Posted 06-29-2018 06:35
    I find there are three kinds of appraisals: The tax appraisal where the person inheriting the object wants it valued as low as possible, the donation appraisal where the donor wants it valued as high as possible, and the auction appraisal where the auctioneer says what they think the item will actually sell for,

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    Philip Jamison
    Philip Jamison Pianos
    WEST CHESTER PA
    610-696-8449
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  • 16.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-28-2018 12:54
    Jim --

    I was told that I am not allowed to actually hire the appraiser. I can recommend one, but that's all. The appraiser that I worked with told me that they would prefer it if I was NOT the person taking the pics and making the notes. I am too close to the customer. In the perfect appraisers world, the piano owner would hire the appraiser, the appraiser would then hire a preferably RPT tech that is not the piano owners regular tuner to do the data collection. The appraiser would then contact a dealer NOT in the same area to provide a value to the instrument. All involved would get paid by the appraiser with fees collected from the piano owner. My part of the work on the couple that I have been hired to go document has taken less than an hour of my time and paid about the same as a two hour service call. 

    I think it would be valuable to all of us if someone like Leopold could comment on this.

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    Geoff Sykes, RPT
    Los Angeles CA
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  • 17.  RE: Tax appraisals

    Registered Piano Technician
    Posted 06-28-2018 13:25
    When I first read that one of the requirements in order to get credentials to be an appraiser is to have been doing this "full time for several years".  Obviously that will never happen with us. This requirement is one for real estate appraisers, so they used that language for all other appraisers.  There is some leeway, but the bottom line is that the appraiser needs to be impartial, and above all, know how to speak the language.

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    Willem "Wim" Blees, RPT
    Mililani, HI 96789
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