Determining the value of donated property would be a simple matter if the taxpayer or appraiser could rely only on fixed formulas, rules, or methods, but using such formulas seldom results in an acceptable determination of fair market value. There is no single formula that always applies when determining the value of property. This is not to say that a valuation is only guesswork. The appraiser must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity.

Four Objectives of Insurance Appraisals:
1. They enable the insured to have the correct amount of insurance coverage.
2. They provide proof the property existed.
3. They provide proof of the property’s pre-existing condition in the event of a total loss.
4. They facilitate claim settlement by providing a detailed inventory, description, and itemized replacement cost.

Federal estate tax applies to the transfer of property at death. The estate of a person who died is liable for the tax on the entire taxable estate including all property, real and personal, tangible and intangible, wherever situated. Generally, the value of the decedent’s property interest for estate tax purposes is the fair market value determined on the date of death.

Appraisers are required to perform appraisals for intended uses of equitable distribution, liquidation, bankruptcy, and many other functions. Equitable distribution appraisals are necessary to ensure fair division of property in such situations as divorce, business dissolution, and the division of an estate amongst heirs.