Author: Dave Maloney

Use Tables and Headers/Footers

Posted on by Dave Maloney

Tables & Headers/Footers: Making Your Appraisal Report Look Professional

(by David Maloney) As a personal property appraisal course writer and instructor since 1994, I’ve reviewed many appraisals submitted by my students. Non-students also often ask me to review their appraisals for completeness or for USPAP compliance. Other than a couple appraisers who prepare their reports in MS-Excel, most all appraisals I have reviewed are prepared in MS-Word. (This article focuses on the Windows user. Similar features, of course, are available to the MAC user.)

Over the years I’ve often noticed a couple report shortcomings that occur on a consistent basis – specifically, these shortcomings include the failure of the appraiser to make use of MS-Word’s “Table” feature and MS-Word’s “Header/Footer” feature.

It is for good reason that appraisers using Windows most often use MS-Word to prepare their reports. MS-Word contains numerous features which, if used, will result in a report that is not only well-designed but also professional in appearance. But, as noted, two of the most important but most frequently under-utilized features of MS-Word are the Table feature and the Header/Footer feature.

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Courtesy Discounts

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Courtesy Discounts

(by David Maloney) A courtesy discount is a reduction in one’s fee for services provided. I suppose those who offer courtesy discounts feel that by discounting their fees, their chances of obtaining future business from the client are enhanced. I’ve often wondered if the client, like Pavlov’s dog, will come to expect additional courtesy discounts in the future, and what his or her reaction would be if not offered a courtesy discount for future assignments. But I digress.

I, personally, do not recall ever having received a courtesy discount from any type of service provider, be it my attorney, accountant, financial advisor, appliance repairman, plumber, electrician, etc. Never.

And as a professional appraiser, I have never offered courtesy discounts nor will I ever offer them. While others might willingly give away their appraisal services, I choose not to do so.

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IRS Guidance for Art Exceeding $20K or $50K FMV

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IRS Guidance: Donation Appraisals for Artwork Exceeding $20K or $50K FMV

(by David Maloney, updated March 2011) Taxpayers and appraisers often refer to IRS Pub 561 Determining the Value of Donated Property in order to ascertain what constitutes a qualified appraisal, i.e., what IRS-required elements of information must be contained in appraisals of property being donated for which a deduction in excess of $5,000 is being claimed by the taxpayer.

But in addition to Pub 561, the IRS Office of Art Appraisal Services (AAS) has issued additional amplifying guidance regarding the appraisal of donated works of art which are valued at over $20,000 or $50K.

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Can Museum Appraiser/Volunteers do Appraisals for their Museum?

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Can Museum Appraiser/Volunteers do Appraisals for their Museum?

(by David Maloney) Donees, staff and their relations are prohibited by the IRS from doing appraisals of items being donated to their respective institutions. But what about volunteers such as committee members or members of the BOD? Are they, too, prohibited?

For the most part, IRS Pub 561 is clear as to who may and may not do appraisals for Federal income tax purposes, including non-cash charitable contributions. Those who may are termed “qualified appraisers.” Those who are not are termed “excluded individuals.” 

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When Assistance is Provided by Others

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When Assistance is Provided by Others

(by David Maloney) Recently, The Appraisal Foundation’s Appraisal Standards Board (ASB) responded to a query submitted by my Appraisal Course Associates partner, AQB-certified USPAP instructor, Bill Novotny. The original issue in question focused on USPAP record keeping requirements pertaining to appraisers who provide assistance with an assignment. There clearly are such requirements for the primary appraiser who signs the report’s USPAP certification, but what obligations apply to the assisting appraiser?

The initial query led to even more questions regarding USPAP obligations pertaining to the primary appraiser as well as to the individual providing the assistance. What if the individual providing assistance is not an “appraiser?” If an appraiser, what if the assistance provided was not “appraisal” assistance? What if the assistance provided was not deemed “significant”? This paper addresses these several questions and clarifies USPAP obligations pertaining to personal property assignments in which assistance is provided by others.

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Jurisdictional Exception Rule – Only One Known Example

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The Jurisdictional Exception Rule Frequently Misunderstood — Only One Known Example

(by William Novotny) USPAP’s JURISDICTIONAL EXCEPTION RULE is intended to address assignment conditions in which there is a conflict between USPAP requirements and the requirements of federal, state or local jurisdictions. Such conflicts would preclude appraisers from complying with those conflicted parts of USPAP. In this article I will briefly review the RULE, provide a typical example of how it is misapplied, and review the only known example of a jurisdictional exception.

I came across this sole example of a jurisdictional exception during a recent recertification process I underwent in order to renew my qualification as an AQB Certified USPAP Instructor for 2010-2011. That there is only one known example of a jurisdictional exception surprised me—as it did some of my colleagues as well.

USPAP defines a jurisdictional exception as:

JURISDICTIONAL EXCEPTION: an assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP

And regarding the RULE, USPAP states:

“The JURISDICTIONAL EXCEPTION RULE provides a saving or severability clause intended to preserve the balance of USPAP if compliance with one or more of its parts is precluded by the law or regulation of a jurisdiction. When an appraiser properly follows this Rule in disregarding a part of USPAP, there is no violation of USPAP.”

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ASB Q&As Clarify ETHICS RULE Changes that Begain with 2010-2011 USPAP

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ASB Q&As Clarify ETHICS RULE Changes that Begain with 2010-2011 USPAP

(by David Maloney) In late 2009 The Appraisal Standards Board (ASB) approved modifications to the Uniform Standards of Professional Appraisal Practice (USPAP). Those changes were incorporated into the 2010-2011 edition of USPAP and associated guidance material.

One of the several changes of interest to the personal property was made to the ETHICS RULE which, by the way, was largely rewritten. The change of interest occurs in the Conduct section of the ETHICS RULE and regards two new disclosure requirements.

  1. The appraiser must now disclose (prior to accepting the assignment or whenever discovered) any current or prospective interest in the subject property or parties.
  2. The appraiser must also now disclose any services performed (in the capacity of an appraiser or otherwise) regarding the subject property over the preceding three years.

The rationale behind this particular change is to allow the client to determine potential conflicts, if any, with past services undertaken by the personal property appraiser regarding the subject property such as having owned, sold, auctioned, appraised, authenticated, restored, brokered, etc. the subject property. For the real property appraiser, such services might include having provided management, leasing, brokerage, auction or investment advisory services.

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Bankruptcy Appraisals: FMV? OLV? FLV?

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Bankruptcy Appraisals: FMV? OLV? FLV?

(by David Maloney) The topic of bankruptcy and bankruptcy appraisals is a complicated one. Be that as it may, a rudimentary understanding of the bankruptcy processes, the type of debtor (individual or business), and the options available to the debtor depending on the type of bankruptcy filing sought (Chapter 7? 11? 13?) is helpful to the appraiser intent on completely identifying the “appraisal problem” including the type and definition of value to be developed when undertaking a bankruptcy appraisal.

Bankruptcy is a legal procedure designed to protect both an individual or business that can’t meet its financial obligations and to protect the creditors involved. The process of bankruptcy requires the debtor to create a report illustrating the “value” of their assets. In order to get a true reading of the value of the individual or business personal property involved, an appraisal is at times, but not always, necessary.

All bankruptcies are governed by Title 11 of the U.S. Code (Bankruptcy Code) and are processed through Bankruptcy Courts — part of the system of Federal courts. The Bankruptcy Courts of the 94 Federal judicial districts were created by Congress just to hear bankruptcy cases and make decisions about disputes between debtors and creditors.

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Bankruptcy Appraisals

Posted on by Dave Maloney

Bankruptcy Appraisals

(by David Maloney) Bankruptcy is a legal procedure designed both to protect an individual or business that can’t meet its financial obligations and to protect the creditors involved. The process of bankruptcy requires the debtor to create an expense report illustrating the “value” of their assets. In order to get a true reading of the value of the individual or business personal property involved, an appraisal is at times, but not always, necessary.

All bankruptcies are governed by Title 11 of the U.S. Code (Bankruptcy Code) and are processed through Bankruptcy Courts — part of the system of Federal courts. The Bankruptcy Courts of the 94 Federal judicial districts were created by Congress just to hear bankruptcy cases and make decisions about disputes between debtors and creditors.

The debtor begins the process by filing a bankruptcy petition with the Clerk of the Bankruptcy Court in the Federal District where the debtor has lived or has had a principal place of business. The various types of bankruptcy are referred to by their respective Bankruptcy Code chapter numbers.

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Appraisal Report Structure: Not Dictated by USPAP

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Appraisal Report Structure: Not Dictated by USPAP

(by David Maloney) There is no single approved format for all personal property appraisal reports, nor is there a required method of presenting information within the appraisal document. USPAP’s STANDARD 8 states that USPAP does not:

 “dictate the form, format or style of personal property appraisal reports, which are functions of the needs of the intended users and appraisers. The substantive content of a report determines its compliance [with USPAP].”

Appraisal reports typically contain a logical presentation of the required elements of information. Appraisers usually choose to prepare either a narrative letter-style appraisal report or a form-style appraisal report.

In a narrative letter-style report the appraisal has the look and feel of a formal letter on company letterhead complete with salutation, content, the USPAP certification statement, signature and enclosures.

In a form-style report the report is prepared in sections according to a pre-designed format, with each section appropriately titled and addressing the relevant elements of information it is designed to contain.

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