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09-05-2012, 04:24 PM
 Junior Member Join Date: Sep 2012 Posts: 2
Calculating Fair Market Value on Jewelry

Hi. Soon I'll be gifting a piece of jewelry to my (grown) child. As a result, I'll need to calculate fair market value to pay the gift tax. Here are my questions:
1. Is it alright to calculate Fair Market Value with the latest (20-year-old) appraisal certificate I have on the item? If not, how *new* do appraisals have to be to satisfy the IRS?
2. Since we've long lost the original sales receipt (it's been in the family since the 1900s), what other ways are there of estimating [and documenting!] the cost basis of the jewelry so if my child ever sells it, it's not necessary to pay total capital gains?
Many Thanks.

09-06-2012, 02:49 AM
 Moderator Join Date: Oct 2010 Posts: 5,254
“1. Is it alright to calculate Fair Market Value with the latest (20-year-old) appraisal certificate I have on the item? If not, how *new* do appraisals have to be to satisfy the IRS?”----> the latest (20-year-old) appraisal certificate??? I don’t think so; however, previous appraisal report may help an appraiser arrive at a more accurate value for a vintage jewelry.FMV is the price for which an item sells on the consumer market. In other words, FMV is what a buyer is willing to pay a seller for a particular item, regardless of whether the item is new or used. Unfortunately, determining the fair market value of used personal items like clothing, jewelry, andcollectibles is not easy because there is no set standard for calculating the value.
An appraiser may also consider general price trends in determining an item's value by taking into account current market conditions, which might increase or decrease the value of the jewelry.

If the sales price is between \$80,000 and \$100,000, your child has neither gain nor loss. For instance, if the sales price was \$90,000 and your child tried to figure a gain using the donor's adjusted basis (\$100,000), he would get a \$10,000 loss. If he then tried to figure a loss using the FMV (\$80,000), your child would get a \$10,000 gain

11-13-2012, 04:33 PM
 Junior Member Join Date: Sep 2012 Posts: 2
Many thanks for the good advice, Wynhough. Will use!

03-01-2013, 03:47 AM
 Junior Member Join Date: Jan 2013 Posts: 13
Wnhough has explained it very nicely. Although, as suggested above you need professional help form an appraiser. The capital gains taxes rate has gone up to 23% in Jan'13 and that too for income above 450k & you can gift up to \$13,000 (or \$26,000 if you are married) to each one of your children (as of 2012).

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