Types of Jewelry Appraisals
There are several types of gem and fine jewelry appraisals. The following the most commonly needed appraisals.
Insurance Appraisals
Most commonly requested and required by many insurance companies, this type of appraisal will describe your jewelry article in detail for a floater or rider policy on your homeowners or renters insurance policy. The appraisal should include a photo and detailed description of the quality of the stones and mounting so that the insurance company can ensure appropriate replacement in the case of a loss.
Estate Appraisals
This type of appraisal is required for establishing the value of an estate for tax purposes. Federal law requires that each piece be valued at the fair market value at the time of death. Fair market value for these purposes is hypothetical and determined as the price a willing buyer would pay a willing seller, both parties with full knowledge of the piece and no constraint to buy or sell at that time in its most common marketplace. Comparable sales must be found and listed with these appraisals.
Charitable Contribution Appraisals
This is an appraisal required by the IRS when donating a piece of jewelry or gem to a charitable organization. The valuation required is the fair market value at the time of donation.
Market Value Appraisals
This is an appraisal that may be needed in the dissolution of a partnership or in distribution of an estate before death. Market value is often considerably less than the retail replacement cost. The reason being that the item is being appraised as "used". The exception to this would be a unique designer piece or an antique piece.
Hypothetical Appraisals
This is an appraisal requested when an item has been lost or stolen without previous documentation as to its quality and value. these appraisals generally give a range of values based on the client's description, photos, and receipts. The fact that the item was not able to be seen by the appraiser is noted in the appraisal.
