Ask an Instructor: What Does Appraised Value Support Mean and Where Is It Applied?

Wednesday, November 17, 2021 in Ask an Instructor

ISA members are invited to send in their questions on all things appraising and education to ISA's instructors. One of ISA's instructors will share answers on the ISA Now Blog. Please send questions to directorofeducation@isa-appraisers.org.

Question: I’m taking the Core Course in Appraisal Studies, and Lesson 21 discusses the IRS Preferred Appraisal Format for Works of Art Valued over $50,000. What does the IRS mean by "appraised value support"? Does this format only apply to Fine Art?

Answer: Appraised value support is a term that includes describing comparables for your reasoned justification. It means that you need to explain how the comparables you selected relate to the subject property and the valuation. It is more than just listing comparable sales data. It is the analysis of this data, i.e. how comparable is your comparable. And, the appraised value support ends with a conclusion that explains to the reader how you arrived at your final value conclusion. This last part is very important! Make sure to connect the dots for your reader so that there is logical reasoning to how you determined the value of the appraised property. The IRS Preferred Appraisal Format for Works of Art is not limited to Fine Art. The IRS states that “Art” includes paintings, sculptures, watercolors, prints, drawings, ceramics, antiques, decorative arts, textiles, carpets, silver, rare manuscripts, historical memorabilia, and other similar objects. The IRS Preferred Appraisal Format is very similar to the format that ISA teaches for describing art, antiques, and collectibles, so it should look very familiar to you.

By Meredith Meuwly, ISA CAPP, Director of Education