Question

To the extent that appraisers are necessary to determine the value of a decedent’s assets, what characteristics will you want in the appraisers you hire? Consider §§ 6662(a), (b), (g), and 6701

Answer 1

APPOINTING AN APPRAISER AN APPRAISER IS NOT A SIMPLE TASK. BECAUSE OUR TAX BURDEN DEPENDS ON HIS ASSESSMENT .OVER VALUATION AND UNDER VALUATION WILL DIRECTLY AFFECT THE PARTY. SO YOU SHOULD TAKE CARE IN SELECTING AN APPRAISER WHO POSSESS THE FOLLOWING CHARACTERISTICS.

CHARACTERISTICS OF AN APPRAISER

ANALYTICAL SKILL

THE APPRAISER SHOULD HAVE THE SUFFICIENT KNOWLEDGE AND SKILLS TO VALUE THE PROPERTIES PROPERLY. THEY SHOULD BE AWARE OF THE VALUE OF ESTATE IN HIS AREA OF APPRAISAL . THAT MEANS LOCAL KNOWLEDGE IS NECESSARY. TO DETERMINE THE VALUE OF LAND ,HE SHOULD KNOW THE MARGIN OF PARTICULAR AREA. ALSO HE SHOULD CONSIDER THE ECONOMIC CHARACTERISTICS LIKE THE AREA, SUCH AS RURAL OR URBAN, AVAILABILITY OF ROADS AND OTHER TRANSPORT SYSTEM, RAILWAY, AIRPORT,HOSPITAL ETC.........THESE THINGS PLAY AN IMPORTANT ROLE IN VALUING PROPERTY.

PROBLEM SOLVING SKILL

AS IT IS A CASE OF PROPERTY, LOTS OF DISPUTES MAY ARISE, SO HE SHOULD SOLVE THESE PROBLEMS IN ORDER TO ACHIEVE THE GOAL.THAT MEANS HE SHOULD POSSESS THE QUALITIES OF A JUDGE, SHOULD HAVE KNOWLEDGE OF LEGAL MATTERS RELATING TO PROPERTY AND LOTS MORE.

TAX KNOWLEDGE

AS THE VALUATION OF THE PROPERTY PLAYS IMPORTANT ROLE IN TAX PAYMENT, THE APPRAISER SHOULD KNOW THE UPDATED TAX LAWS. DEFAULT IN ESTIMATION MAY LEAD TO TAX DISPUTES AND PENALTIES. ACCURACY SHOULD BE MAINTAIN IN PAYING TAX. OTHERWISE HIGH AMOUNT OF PENALTY MAY BE IMPOSED BY THE GOVERNMENT. UNDER VALUATION OF PROPERTY IS A SERIOUS CASE. BECAUSE IT LEAD TO REDUCING TAX AMOUNT AND THE TAX AUTHORITY MAY ISSUE NOTICE AND TAKE INVESTIGATIONS IN THIS REGARD. IF THE AUTHORITY IDENTIFIED IT AS TAX EVASION OR AVOIDANCE ,THEY IMPOSE PENALTY .

IF THE PROPERTY OVER VALUED BY THE APPRAISER ,IT LEADS TO PAYMENT OF MORE AMOUNT AS TAX. SO LOOKING FOR MERE BENEFITS MAY LAD TO HUGE LOSS.

RELIABILITY

THE OPINION OF THE APPRAISER SHOULD BE RELIABLE AND UNBIASED . ENSURE THAT NO EXTERNAL HANDS INVOLVED IN DECISION MAKING OF APPRAISER. BECAUSE INTERFERENCE OF EXTERNAL PEOPLE MAY LEAD TO MISREPRESENTATION OF THE RESULT.

TIME MANAGEMENT AND DECISION MAKING

APPRAISER SHOULD COMPLETE HIS WORK IN TIME. HE SHOULD NOT ENGAGE IN MORE THAN ONE APPRAISAL AT A TIME. ALSO HE SHOULD HAVE THE SUFFICIENT SKILLS IN DECISION MAKING IN THIS REGARD.

AS THE VALUATION MADE BY THE APPRAISER IS USED FOR TAX PURPOSE, ENSURE THAT HIS FINDINGS ARE CORRECT .SO APPOINT AN EXPERT MAY HELP THE TAX PAYER TO REDUCE TAX BURDEN.

TANK YOU