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An attorney who has previously hired me to do IRS estate tax appraisal work for called me several months ago to do some research concerning the change in the value of diamonds for the past three years. I found the information he needed, and provided it to him. Several weeks ago, I ran into him in an informal setting and asked him what had happened concerning this matter. It seems that he was hired to do the estate work for the heirs of a Mexican client whose father had purchased a large amount of loose diamonds during his life to serve as a retirement investment, expecting their value to increase. The heirs (being unaware of the problems regarding inaccurate appraisals) went to a local retail jewelry store and asked to have the diamonds appraised for tax purposes. The appraiser, not educated in the procedures for obtaining fair market value and not realizing the huge tax liability, appraised the diamonds for the highest value.......insurance replacement. The attorney who called me was very knowledgeable in estate tax issues, and used my new values and negotiated with the IRS to use auction prices to assess the tax due instead of replacement cost. This resulted in a net savings of $25,000 to the heirs! The moral of the story: When you are asked to negotiate taxes based on an appraiser’s values, be sure you hire an accredited appraiser who has accurate data, experience, and expertise.
Susan Eisen, Copyright, January, 1999 from a column in her monthly newsletter