[NHCOLL-L:2418] Re: Donation appraisals

[Doug Yanega]

>2) The commercial value of a collection is often only a third of the
>appraised value. Sometimes maybe 50%. This allows a dealer to recover
>costs for picking up a collection, cataloging it, advertising it, and then
>waiting until it sells. They have to may some margin of profit as well.
>When my Dad was alive and collected coins, he had two books, one listed
>the "value of a coin" the other what a dealer would pay for that coin. The
>differences were sometimes quite far apart.

This particular problem has been largely eliminated nowadays, thanks 
to the virtual elimination of middlemen in the collectibles market 
(due to eBay and other online auction services). You no longer have 
to sell to a dealer, but can sell directly to whoever wants the item. 
The result is that for most collectibles, people who want to sell can 
get more than they ever could get from dealers, and people who want 
to buy can get things cheaper than they ever could from dealers; that 
is, the actual market value, once the middlemen are gone, tends to be 
less than "catalog value", but better than the 30-50% price that is 
quoted above.

If anything, natural history-related collectibles, by virtue of their 
not having prices set by well-known standard catalogs, seem to be 
worth MORE now than ever before, thanks largely to extremely naive 
buyers who overvalue things in the process of competitive bidding. 
I've seen one eBay dealer who routinely sells common insects in cheap 
Riker mounts for exorbitant prices - for example, a pair of Luna 
moths with a starting price of US$80 (when specimens of similar or 
superior quality can be purchased through regular insect dealers for 
5 dollars a pair or less), and they've sold dozens of such pairs, 
often getting well more than the $80 starting price. As long as one 
doesn't have an ethical problem with bilking the rubes, one could 
make quite a killing selling specimens this way. Myself, I find it 
reprehensible, but I'm often reminded that so it goes with fools and 
their money.

That being said, however...

For tax purposes, the crucial thing in the US is this: you must be 
able to demonstrate, with tangible proof (if audited), that the value 
given is equal to "fair market value". So, if you have trilobites or 
ammonites or such, and there is a commercial catalog in print 
somewhere which sells equivalent specimens (of the same taxa), then 
THAT method of valuation is essentially the only one that the IRS 
will accept other than a paid appraiser, and only so long as the 
total estimated value is between $500-$5000 (following IRS form 
8283). Anything over $5000 *requires* formal appraisal, like it or 
not.

Sincerely,
-- 

Doug Yanega        Dept. of Entomology         Entomology Research Museum
Univ. of California - Riverside, Riverside, CA 92521-0314
phone: (951) 827-4315 (standard disclaimer: opinions are mine, not UCR's)
              http://cache.ucr.edu/~heraty/yanega.html
   "There are some enterprises in which a careful disorderliness
         is the true method" - Herman Melville, Moby Dick, Chap. 82