The Charitable Donation and the Appraiser's Prior Sale

The prior sale does not automatically disqualify you, but it creates a familiarity and financial-history relationship that must be evaluated and disclosed. You sold the client a different painting two years ago; that is not the subject property, but it may affect independence and the client's expectations. Disclose it in the report and certification, and consider whether you can remain objective.

The prospective paid advisory position with the museum is a conflict of interest because the museum is an intended user or beneficiary of the donation appraisal. Even an informal discussion can create the appearance that your value conclusion is influenced by a future paid role. Disclose the relationship and either decline the museum position during the assignment or decline the appraisal; do not let the two proceed together without client and user understanding.

The donor's statement that a dealer offered "at least $75,000" and the request to support that figure raise advocacy and predetermined-value concerns. The Ethics Rule prohibits accepting an assignment contingent on a value conclusion and prohibits advocating for a client's position. You must appraise independently. An unwritten dealer statement is also weak market evidence until you know the terms, date, parties, and whether it was an arm's-length offer.

A preliminary number that conveys an opinion of value is still an appraisal if it is communicated to the client and likely to be relied upon. Putting it on letterhead increases the risk that it will be treated as a completed appraisal. USPAP does not exempt "preliminary" or "oral" values from the applicable development and reporting requirements when they are part of an appraisal assignment.

You should decline to issue a value on letterhead before completing the analysis. You can explain the scope of work, the information you still need, and the timeline; you can discuss general market conditions without applying them to the subject; and you can advise the client to request an extension if the tax deadline is the concern. If you do provide an oral preliminary opinion, make clear it is not a completed appraisal, is subject to further analysis, and may not be used for the tax deduction. But the safer course is not to give a number that the client can characterize as your appraisal conclusion before the work is done.

Neither is a completed arm's-length sale. The dealer statement is an offer, possibly a buying offer, and its evidentiary weight depends on whether it was written, whether it was contingent on anything, whether the dealer had inspected the painting, and whether the dealer was acting as principal or agent. If it was a wholesale offer, it may indicate a lower market level, not a retail fair market value. You should try to verify it and, if unverifiable, mention it only as unconfirmed market commentary or omit it from the primary analysis.

The $68,000 gallery listing is an asking price, not a sale. It may support a replacement-cost conclusion or show the top of the retail asking range, but it does not prove that a willing buyer would pay that amount. The auction comparables of $28,000–$52,000 are stronger evidence of exchange, but they require adjustment for the subject's old lining, inpainting, condition, date, size, and provenance. Reconcile the evidence by explaining why the subject falls where it does within the range; do not simply adopt the client's desired figure.