Find Answers to Your Art Collecting and Appraisal Questions
Is Art a Good Investment?
The answer is it depends. The art market is huge and for art to appreciate, for starters it has to have a secondary market. This is quite rare and only very small percentage will fall into this category. Understanding which art is likely to fall into this category takes a lot of expertise and since art in general is made with other intentions (i.e. its creative value), there are a great deal of variables that have to come together for an artist's work to appreciate. For a deeper dive, check out my YouTube video "Why the Art Market is Different than the Stock Market"
What is an Art Appraisal?
An art appraisal is technically an opinion of value, however, this has a lot more layers to it than that definition makes it sound. A formal appraisal is often misrepresented as a one page document that just has a value stated on it. A qualified appraisal is one that follows specific rules and ethics and is governed by the Uniformed Standards of Appraisal Practice. This is the same body that sets the standards for real estate appraisals.
To Learn more, check out my YouTube video "What is an Art Appraisal (& What is not)"
A What Does an Art Consultant Do?
An art consultant provides unbiased and educated information that helps collectors buy art wisely. An art consultant comes into you home and provides you with options that you aren't going to find in just the local galleries. They will tie in your story, with the design of your home to create a world class collection that you love.
To learn more, check out my YouTube video: "What does an Art Consultant Do"
What is the Difference Between the Primary and Secondary Art Market?
The primary art market the artist is paid directly (after costs) and it is the first time the art has been offered for sale. In the secondary art market, the art is being resold by the owner at that time.
Can I Use an Insurance Appraisal for Estate Tax Purposes?
No you can't and here's why. An insurance appraisal is for the intended use of getting insurance coverage to cover your personal property in the case of loss or damage. To determine this replacement value we are looking at what it would cost for you to get a replacement in the marketplace where you typically shop. On the other hand, when you get an appraisal for estate tax purposes, the IRS requires the value being sought to be fair market value.
My parents left me several pieces of art that I would like to donate to a non-profit? How do I go about this?
You need to make sure the donation is in line with the mission of the non-profit. An appraisal might be needed if its over a certain fair market value. Make sure you get advice from your tax specialist as well as a qualified appraiser.
What is fair market value in art?
Fair Market Value is defined as: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." IRS Regulation §20.2031-1.
I just sold my house and have a bunch of art I need to sell, where can I do that?
Each piece of art ranges in value so a couple of options might be a consignment store, retail gallery, private dealer, and sometimes a platform like Ebay would be best. Each of these serves a different market and they all take a different percentage of the sale. So you need to discern which offers the most money and in the timeframe you have.