What's My Art Worth?May 02, 2022
"What's my art worth" is a question on many collector's minds. How can you find out what your art is worth without being taken for a ride? The value of art depends on what you are doing with it. What does this mean?
Well, if you want to sell the art, it will be worth $x, and if you want to insure it, it will be worth $y. If you need to know what it's worth for donation or estate tax purposes, you guessed it....$z.
Let's take a look at if you were to go to sell it. You could send it to auction, sell it on E-bay, consign with a gallery, to name a few. Each of these outlets is going to have an amount that their audience is willing to pay, and then a fee associated; usually a percentage of the total sales price.
Next, let's take that same object and look to insure it. If you insure it, the purpose is the be covered for loss or damage, with the intention of being "made whole" if this loss or damage occurs. You want to be able to go out in the marketplace and replace this object in the market that you usually shop for such items, with one of comparable quality, in a reasonable time frame. So the "value" for insurance is going to typically be higher than what you as a seller would be selling it for: makes sense right?
Now, let's look at the "value" of the same object again, this time for donation or estate tax purposes. The IRS governs the definition of what's called "Fair Market Value (FMV) " and it's "the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts". (IRS Publication 561 [Rev. February 2000]). Where do we find such a value? By looking to actual past sales and adjusting values depending on how comparable these past sales are.
So you can see it's not a simple "one price fits all" answer to what your art is worth, so start by asking the question, "why do I want to know the value?", and this will guide you to look in the right place for your answer.