What is an Appraisal?
An appraisal is a professionally prepared report documenting a reasoned and substantiated conclusion of value for a specific purpose. This value is based upon research at the appropriate market level and supported by facts. An appraisal may be used in the process of planning your estate, obtaining insurance coverage, settling a loss claim, to facilitate equitable distribution among heirs, to determine the amount of estate tax owed, for charitable contribution (donation) to a qualified nonprofit organization, to establish a new cost basis, to establish the cost-benefit of sale, or for dissolution of marriage.
An appraisal report is a signed document suitable for submission to insurance companies, the courts and the Internal Revenue Service. As required by the Code of Ethics of the American Society of Appraisers and the Uniform Standards of Professional Appraisal Practice (USPAP), the appraiser must be unbiased and report the facts. Appraisal procedures, research methodology, market selection and the resulting value conclusions vary depending on the purposes, functions and effective dates of appraisal assignments. A report prepared for one purpose very likely would be inappropriate for another; for instance, an insurance coverage appraisal would not be acceptable for use in estate tax or charitable contribution matters.