Frequently Asked Appraisal Questions
The purpose of this page is to answer some of the appraisal questions we’re most frequently asked. The most generic questions are at the top and work down towards questions that are very specific to the appraisal services we provide at Heavy Equipment Appraisal.
What is a Desktop Appraisal?
A Desktop Appraisal (limited scope appraisal, online equipment appraisal) is the practice of valuating an item without physically inspecting that item.
For more information, see our Online Equipment Appraisal page.
What is an On-Site (Field) Equipment Appraisal?
For our purposes, a field appraisal is the practice of valuating an item after having the chance to physically inspect that item.
For additional detail, please check out our On-Site Equipment Appraisal page.
Who do we work with?
The simple answer: we provide equipment appraisals for anyone that needs one.
Previous clients include (but is not limited to):
- Small Business Owners
- Business Brokers
- Mergers and Acquisitions Specialists
- Turnaround Management Firms
- Government Officials
- And many more…
What areas do you cover?
We offer nationwide heavy equipment appraisal services (and beyond).
What is an appraisal?
An appraisal is defined as an objective opinion giving sound reasons for the conclusion of value. It should be noted that valuation is considered by the courts to be imprecise.
More specifically, according to Internal Revenue Service (IRS) code, Section 170(f)(11)(E)(i) provides that the term “qualified appraisal” means an appraisal that is (1) treated as a qualified appraisal under regulations or other guidance prescribed by the Secretary, and (2) conducted by a qualified appraiser in accordance with generally accepted appraisal standards and any regulations or other guidance prescribed by the Secretary.
What is an appraiser?
According to Internal Revenue Service (IRS) code, 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.
What is Fair Market Value?
According to Internal Revenue Service (IRS) Income Tax Regulations Section 1.170A-1(c)(2), Fair Market Value is defined as:
The price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts.
What is Liquidation Value?
Liquidation value is a financial condition existing at the time of sale so to require a sacrifice by selling far below the appraised value.
This is especially indicative of a price when the seller attempted to obtain Fair Market Value and was unable to sell the item(s).
Liquidation is often referred to as a worst case scenario value. i.e., if you HAD to sell tomorrow, what price could you fetch?
Auction sales are often in-line (but not always) with liquidation value.
Liquidation values are usually (but not always) lower than Fair Market Values since they are quicker sales and don’t allow machines to receive normal market exposure.