Art collections held at death are subject to federal estate tax based on their fair market value as of the date of death or the alternate valuation date. Lifetime gifts of artwork similarly require qualified appraisals to establish value for gift tax purposes. In both cases, the IRS requires that valuations be conducted by qualified appraisers and documented in USPAP-compliant reports.

Fair market value for estate and gift tax purposes is defined as the price at which property would change hands between a willing buyer and willing seller, neither being under compulsion to act and both having reasonable knowledge of relevant facts. Applying this standard to fine art requires analysis of auction results, private sale data, dealer pricing, exhibition history, provenance, condition, and broader market dynamics.

We prepare qualified appraisals for estate and gift tax filings, including valuations reported on IRS Form 706 (Estate Tax Return) and Form 709 (Gift Tax Return). Our reports are structured to meet the documentation requirements of Treasury Regulation §20.2031-6 and are prepared with the understanding that they may be subject to IRS examination. Estate and gift tax valuations often involve complexities beyond establishing a single value for a single work. Collections may include fractional interests, works with attribution questions, pieces acquired decades ago with limited documentation, or holdings spread across multiple locations and jurisdictions.

We address these complexities directly in our reports, documenting the analytical basis for each valuation and the specific factors considered. Where blockage discounts, marketability considerations, or other adjustments are warranted, we provide the supporting analysis and comparable data.

We work closely with estate attorneys, executors, trustees, and tax advisors throughout the appraisal process. Coordination with legal counsel is particularly important when valuations may be subject to IRS challenge or when estate planning strategies depend on specific valuation outcomes.