Contents of this Page
- Valuation information
- Valuation Basics
- Insurance Replacement Value Documents
- Resale/Marketable Cash Value Documents
- Fair Market Value Documents
- IRS Documents
Valuation Information
- Almost all appraisals are done on-the-spot while you wait; your jewelry will never leave your sight. You may leave your jewelry if you do not wish to wait.
- Time estimates for valuation are impossible without first inspection by the VT Gem Lab.
- All items must be cleaned before valuation. This can be done at home or at the VT Gem Lab.
- A contract must be signed by both the valuer and client before any consultation take place.
Valuation Basics
“A man walking through the desert, dying of thirst, carries a parcel of diamonds. He comes across a man with water. How many diamonds, if not all, would he give for just one cup of water?”
- A 1.01 carat, G color, VS1 clarity, Excellent cut diamond
- Sale takes place in the Burlington, VT region
Change a single one of these aspects and the value conclusion will differ. This is appraisal theory. With just this simple knowledge, one can understand how an appraisal that reads “One 1.01 carat, G color, VVS1 clarity, Excellent cut diamond; Value: $25,000” is simply not enough. What if the client was purchasing it from auction, or a pawn shop? Would you expect the value to differ?
A professional appraiser understands not just jewelry manufacturing and gemology, but marketplaces and many different transactions that take place within these marketplaces (and ultimately how they affect value). The following chart shows many reason for valuation as well as the corresponding value.
Insurance Replacement Value Documents
Replacement values are used for insurance purposes. Three types of replacement values are Replacement Value-New, Replacement Value-Reproduction and Replacement Value-Like Kind and Quality.
Replacement Value-New is defined as the price it would take to replace an item with a new one. This is used for items that are still being manufactured and publicly offered for sale.
Replacement Value –Reproduction is defined as the price it would take to make a reproduction of a piece of jewelry. This is used for items that are no longer being produced.
Replacement Value-Comparable is defined as the price it would take to replace an item with another of similar quality. For example, a circa 1910 Art Deco ring would be replaced by a circa 1915 ring.
Many times, it is up to you to decide how you would like to be compensated for the loss of your fine jewelry. Make sure your jewelry is value by the right approach so that it will be replaced in full if lost, damaged or stolen.
Resale/Marketable Cash Value Documents
Reselling jewelry can be a difficult task. One must be able to show both quality and a reasonable asking price before the item will sell. These aspects change, of course, by where you would like to sell your item. For example a solitaire diamond ring will sell for a different price at a pawnshop, compared to an auction house, jewelry store, a broker, or retail consumer. Consult your appraiser on the best place to sell your jewelry before you seek an appraisal.
Click HERE for a chart on reselling Jewelry, or HERE for a poster sized chart on reselling jewelry.
Fair Market Value Documents
The IRS or your state may require an appraisal for Estate Tax, Equitable Distribution, Divorce settlement, Bankruptcy and more. These reports must be produced in accordance with bylaws and ethical standards set forth by the appraisal foundation, the IRS and state law. Consult your appraiser and lawyer on the appropriate laws that pertain to your appraisal needs.
IRS Documents
Documents that must be sent to the IRS for tax, donation, death or divorce are required to be written by a qualified appraiser. A detailed description is required for all items, however an appraisal is not always required.
An appraisal by a qualified appraiser is required for estate tax if any one item is valued at more than $3,000.00, of any collection of similar articles is valued at more than $10,000.00 (U.S. Treasury Regulation 20.2031 -6).
An appraisal by a qualified appraiser is required for donation when an individual item is worth more then $5000.00. If the donated value exceeds $20,000.00, then a copy of the appraisal must accompany the form (IRS form 8283).
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