Selecting a Valuation Professional
The Internal Revenue Code (IRC) requires a qualified appraisal for donated property for which a deduction of more than $5,000 is claimed. For tax returns filed after February 16, 2007, an appraisal must be completed by an appraiser that meets the following qualifications:
- Holds an appraisal certification from a recognized professional appraiser organization.
- Has successfully completed college or professional-level coursework that is relevant to the property being valued.
- Has at least two years of experience in the trade or business of buying, selling, or valuing the type of property being valued.
Four organizations in the United States certify business appraisers. They are:
- The American Institute of Certified Public Accountants which issues the Accredited in Business Valuation (ABV).
- The Institute of Business Appraisers which issues the Certified Business Appraiser(CBA).
- The American Society of Appraisers which issues the Accredited Senior Appraiser (ASA) and the Accredited Member (AM).
- The National Association of Certified Valuation Analysts which issues the Certified Valuation Analyst(CVA).
The table shown below compares the requirements to obtain credentials from each of these professional organizations.
|Existing Certification Req.||Yes, CPA||None||None||No|
|Education||4 yrs college||4 yrs||4 yrs||4 yrs|
|Experience||10 Rpts, 1 Yr CPA||2 Rpts||5 years/
|Report Review||Exception Basis||2 Rpts||2 Rpts||1 Rpt|
|Cont. Ed. Credits per Year||40||12||20||40|
|Professional Standards||Yes, CPA/Yes, ABV||Yes||Yes||Yes|
An appraiser that has two years experience and holds one of the above designations would qualify as a “qualified appraiser” under the IRS guidelines.