When it comes to taxes, the Internal Revenue Service (IRS) plays a crucial role in ensuring that taxpayers pay their fair share. As such, the IRS has established a set of rules and regulations that govern how taxpayers must report their assets, liabilities, and other financial information.
As part of these rules, the IRS requires that certain assets be appraised by a qualified appraiser in order to accurately determine their value for tax purposes. A qualified appraiser for IRS is an individual who has been certified by the IRS to provide appraisals of assets for tax purposes. Qualified appraisers must meet certain criteria set by the IRS.
What is a Qualified Appraisal?
The IRS has laid down several requirements regarding the correct process of a qualified appraisal and who exactly is a qualified appraiser. Before we go ahead and look at the criteria that a qualified appraiser should meet as per the IRS, let’s first understand what a qualified appraisal is.
A qualified appraisal provides an official, unbiased opinion of the value of a property. An appraisal is required for many financial transactions.
Some such transactions include mortgage financing, sale and purchase agreements, insurance claims, tax assessments, and estate planning. A qualified appraisal can be used to help determine the fair market value (FMV) of a property and to ensure that the buyer and seller are both getting a fair and an accurate deal.
A qualified appraisal is a document that is created, signed, and dated by a qualified appraiser in accordance with generally accepted appraisal standards as laid down by the IRS. For an appraisal to be valid it should not be made earlier than 60 days before the date of contribution of the appraised property.
Who is a Qualified Appraiser?
According to the IRS, a qualified appraiser means an individual who meets the requirements set forth in Revenue Procedure 98–25 and its subsequent modifications. This includes individuals who have earned an appraisal designation from a recognized professional appraiser organization. It also includes individuals who have been awarded an appraisal designation from other organizations that require verifiable education, experience, and testing requirements for the specific type of property being valued.
An appraiser for IRS needs to have certain specific characteristics to be called a qualified appraiser. These criteria are intended to ensure that appraisers are qualified to perform valuations that are accurate and reliable.
Qualified appraisers must possess a variety of skills, qualifications, and experience, as outlined by the IRS. To be considered qualified, an appraiser must have:
1. An education in the field of appraisal: An appraiser should have a minimum of a college degree in appraisal or a related field, such as accounting, finance, economics, or business. A qualified appraiser must have verifiable education and experience in valuing the type of property for which the appraisal is being performed.
2. Certification from a professional appraisal organization: As an additional qualification, the appraiser should be certified by a professional appraisal organization, such as the Appraisal Institute or the International Association of Assessing Officers.
3. Knowledge of the valuation process: An appraiser should have a comprehensive understanding of the appraisal process, including the principles of appraisal and the methods used to determine value.
4. Experience in appraising similar properties: An appraiser should have experience appraising similar types of properties, such as residential or commercial, as well as knowledge of the local market.
5. Professional objectivity: An appraiser should be able to remain objective and unbiased in their appraisals, without being influenced by the interests of the client.
6. Good communication skills: An appraiser should have strong communication skills in order to effectively explain their findings to the client.
The IRS also requires appraisers to maintain professional standards when performing appraisals. All appraisers must adhere to the Uniform Standards of Professional Appraisal Practice and the Code of Ethics and Professional Conduct established by their professional organization.
By following these guidelines, appraisers can ensure that they are qualified to provide accurate and reliable appraisals and be acceptable appraisers for the IRS. In addition, they can help protect their clients from potential penalties that can be incurred due to inaccurate or unreliable appraisals. If you are looking for professional experts contact Appraisily today.
Cited Sources
https://www.law.cornell.edu/cfr/text/26/1.170A-17
https://www.hempsteadco.com/irs-defines-qualified-appraisal-and-qualified-appraiser/
https://www.thebalancemoney.com/what-is-a-qualified-appraisal-5221098
https://www.irs.gov/publications/p561
https://www.marcumllp.com/insights/new-irs-regulations-what-constitutes-a-qualified-appraisal
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