In Notice 2006-96; 2006-46 IRB 1 (19 Oct 2006), the IRS issued transitional guidance with specific definition of a "Qualified Appraiser."
The Pension Protection Act of 2006 (PPA 2006), Sec. 170(f)(11) creates new guidelines and penalties for appraisals and appraisers. A qualified appraisal now will be defined as one that meets "generally accepted appraisal standards" and follows the principles of Uniform Standards of Professional Appraisal Practice (USPAP).
Under Sec. 170(f)(11)(E)(ii)(I), the appraiser must have experience and competency in evaluating the type of property, verifiable education and experience and must declare that he or she understands a substantial or gross valuation misstatement could lead to civil penalty under Sec. 6695A.
Under "Transitional terms -- qualified appraiser" the section states:
(1) Appraisal designation. An appraiser will be treated as having earned an appraisal designation from a recognized professional appraiser organization within the meaning of § 170(f)(11)(E)(ii)(I) if the appraisal designation is awarded on the basis of demonstrated competency in valuing the type of property for which the appraisal is performed.
Is the above just a "Definition" or is it a "Requirement" that appraisers must hold a designation from an appraisal organization?? Click below to read more . . .
According to http://www.giftlaw.com/washington.jsp?WebID=GL1999-0114 "The transitional guidance provides a reasonably clear definition of the education and experience requirements. For real property gifts on returns filed after October 19, 2006, the appraiser meets the required standards if he or she is licensed or certified for the type of real property by the appropriate state agency. Some state agencies have a separate certification for residential real estate and other types of real estate, such as commercial real estate. In these states the appraiser must have the appropriate designation of the type of real estate gifted to charity"
Section 170(f)(11)(E)
(ii) provides that the term "qualified appraiser" means an individual who (1) has earned an appraisal designation from a recognized professional appraiser organization OR has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary,
(2) regularly performs appraisals for which the individual receives compensation, and
(3) meets such other requirements as may be prescribed by the Secretary in regulations or other guidance.
Section 170(f)(11)(E)
(iii) further provides that an individual will not be treated as a qualified appraiser unless that individual (1) demonstrates verifiable education and experience in valuing the type of property subject to the appraisal, and (2) has not been prohibited from practicing before the Internal Revenue Service by the Secretary under § 330(c) of Title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.
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