Personal Property (PP)
What the PP candidate must know
Personal property is movable property not classified as real estate - furniture, art, collectibles, antiques, equipment, and intangibles attached to chattels. The candidate must distinguish real property from personal property (fixtures test: annexation, adaptation, intention) and identify tangible vs. intangible personal property.
Concepts to hold
Match the value premise to the assignment: fair market value (estate, divorce, donation), replacement cost (insurance), orderly liquidation (business wind-down), and salvage/scrap. Know the three approaches as applied to chattels: sales comparison (most common - auction records, dealer prices), cost (reproduction cost less depreciation for unique items), and income (rare, e.g., royalty-generating IP or rental equipment). Understand provenance and condition as value drivers for art and antiques, and that authentication can change value dramatically.
Traps in questions
- Using insurance replacement value for an estate tax FMV assignment.
- Treating a fixture as personal property (or vice versa) without applying the fixtures test.
- Ignoring buyer's premium or auction commissions when using auction comparables.
- Assuming a signature or mark guarantees authenticity.
Worked rule of thumb
For a donated painting: identify FMV (willing buyer/seller, appropriate market), use recent comparable auction results, adjust for condition and provenance, and do not use the owner's insurance schedule. Document the market level chosen.