An attorney I have previously done IRS estate tax appraisals for called me several months ago to do some research concerning the change in value of diamonds the past three years. I found the information he needed, and faxed it to him. Several weeks ago, I ran into him in informal setting and asked him what had happened with this matter. It seems that he was hired to do the estate work for the heirs of a Mexican client who had purchased a amount of loose diamonds during his life to serve as retirement, expecting their value to increase. The heirs unaware of the problems regarding inaccurate appraisal went to a local retail jewelry store and asked to have the diamonds appraised for tax purposes. The appraiser, 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, used my data and negotiated with the IRS use auction prices to assess the tax due instead of replacement costs. This resulted in a net savings of $25,000 to the heirs. The moral of the story: When you are asked to negotiate based on an appraiser’s values, sure you hire an appraiser who has accurate data, experience, and expertise beforehand.
Susan Eisen, January, 1999.