The implication was that the appraisal could be written for an artificially inflated value. IRS requirements for appraisals used for tax purposes have their own set of standards that will vary for each individual piece of tangible property. Whether a person doing an appraisal of a piano needs to be a licensed appraiser is debatable since the trade does not offer a certification (unlike real estate for example) and it may be sufficient that you are able to demonstrate some expertise by virtue of having been in the trade for x number of years, participated in buying and selling, etc. Some information can be gleaned from this website. http://www.irs.gov/pub/irs-drop/n-06-96.pdf I don't know whether the appraiser is criminally liable for a providing information which can't be substantiated (in the case of a piano) but certainly if they willingly and knowingly participate in an act to defraud the government of tax revenue there could be some exposure. Without question the person taking the tax write off needs to be sure that the documentation provided is adequate to survive an audit. A tax attorney or tax accountant can probably provide that information. Additionally, someone who is performing the appraisal should be familiar with the same requirements since that is the service you are selling. You should also be prepared to demonstrate where and how you got the information to come up with the FMV. Typically, copies of these comparable listings would be part of the appraisal package along with photographs of the object in question. The work to prepare such a document is much more involved than a simple phone call to tell the customer "Oh, I'd say about $X", and therefore the fee should reflect that. In general, if you are appraising a piano it is helpful to qualify what it will be used for as the amount of work and the accompanying fee can and should vary accordingly. David Love www.davidlovepianos.com -----Original Message----- From: pianotech-bounces at ptg.org [mailto:pianotech-bounces at ptg.org] On Behalf Of Kendall Ross Bean Sent: Saturday, December 06, 2008 1:00 PM To: pianotech at ptg.org Subject: Re: [pianotech] (no subject) Perhaps I missed something, but it is not at all clear to me why many seem to be automatically assuming that the communication from David Ilvedson's customer below is soliciting some sort of fraudulent behavior. I simply don't have have enough information to make that assessment. I don't know, for instance, what preceded this communication, or if the customer had any basis (like a prior appraisal or valuation of some sort on the piano in question) for the figures he is quoting. Perhaps he also has some figures from his accountant that he is trying to work with. I mean, he does say "If the appraisal was [this figure], or if the appraisal was higher..." which to me seems to acknowledge that he doesn't assume what the appraised value will be. Perhaps David Ilvedson could cast some more light on the circumstances surrounding this "snapshot" he has given us. David Love commented in a recent post on this particular situation, "I do appraisals but I don't fill in numbers on request. The appraisal must be based in some kind of reality." I think most of us here would subscribe to that. But to me it is not at all clear that that is what this customer is trying to do. I can see ways that a person writing this could be legitimately and legally trying to minimize the amount of taxes he has to pay. Don't we all try to do that? If I understood the initial post correctly, David Ilvedson simply commented that he didn't see how a person selling a piano (rather than donating it in its entirety) could also claim a tax deduction on it. It seems some are assuming that that is not possible, but I'm not at all sure that is the case. It also seems that some are assuming, from this limited communication, that the customer is trying to tell the appraiser what they would like the piano appraised at. Like I say, based on the limited "snapshot" we have been given, that is not at all clear to me. I would need more information before deciding "not to touch this with a thirty-nine foot pole". In recent years, I have become a lot more careful about assuming that I know a person's intent. Like I say, maybe I am missing something here that others can plainly see. (Wouldn't be the first time! ;-) ) Perhaps someone could fill me in. Sincerely~ Kendall Ross Bean ~PianoFinders -----Original Message----- From: Ron Nossaman [mailto:rnossaman at cox.net] Sent: Friday, December 05, 2008 1:39 PM To: David Ilvedson; pianotech at ptg.org Subject: Re: [pianotech] (no subject) David Ilvedson wrote: > > > I have a customer who emailed me the following: > > "Thanks for your reply. Because of how taxes work, if we could get a > written appraisal on the piano of $20,000.00-$25,000.00 we could sell > the piano for less and then "write off" the remainder. For example, if > the appraisal was $20,000.00 we would sell the piano for about > $15,000.00 and if the appraisal was higher we would sell it for even less. " > > Does that sound right? I don't see how they can write off a personal > sale...???? > > > David Ilvedson, RPT Why not appraise it at $40k, and offer to haul it off for them? I'd wish them luck with whoever their appraiser finally turns out to be, draw the drapes, turn out the lights, and check the caller ID before answering the phone for a while. Ron N
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