How is an artwork valued for an estate or probate?

Valuing an inherited artwork follows the same logic as any other estate asset: a qualified appraiser sets its fair market value — the price a willing buyer and willing seller would agree to, neither under pressure — usually as of the date of death. Above certain dollar thresholds, the IRS can independently review that valuation before the estate settles.

Quartz Seam (98 x 152 cm), mixed media with acrylic and gold leaf on canvas, in situ — Alyne Perfeito, Perfeito Studio — Quartz Seam (98 × 152 cm), in situ. Perfeito Studio.

What "fair market value" means for an inherited artwork

The IRS defines fair market value (FMV) as the price property would sell for on the open market, agreed between a willing buyer and a willing seller, with neither required to act and both having reasonable knowledge of the relevant facts. That standard, set out in IRS Publication 561, is the same one used across income, gift, and estate tax contexts — including a painting that passes through an estate.

For estate purposes, that value is normally fixed as of the date of death. An executor can instead elect the "alternate valuation date," six months after death, under Internal Revenue Code Section 2032 — but only for the entire gross estate at once, never for a single painting picked out of it, and only if the election lowers both the estate's value and the tax owed. Anything sold, distributed, or otherwise disposed of within that six-month window is valued as of that transaction date instead.

Why a formal appraisal, and who is qualified to write one

USPAP — the Uniform Standards of Professional Appraisal Practice — is the framework the U.S. appraisal profession works to, covering real estate, business valuation, and personal property, the category fine art falls under. USPAP does not dictate a report template; as its Appraisal Standards Board puts it, "it is the appraiser, not a form, that complies with USPAP." What it does require is that the appraiser demonstrate competence in the specific type of property, act independently of any interest in the outcome, and support every conclusion with facts rather than opinion.

Bodies such as the American Society of Appraisers accredit personal-property appraisers across dozens of specialties, from fine art to books to coins, and list estate settlement among the standard reasons collectors and executors engage one. For a piece with no auction history — typical for a working artist earlier in her career — a credible valuation still has to show its reasoning: comparable sales of similar work, condition, medium, and documented provenance, not a number pulled from a price list.

When the IRS reviews the appraisal itself

Most estates never hear from the IRS about a specific artwork. But when a return under audit includes an appraisal for a single work of art or cultural property valued at $50,000 or more — on an income, estate, or gift tax return — the examining agent generally must refer the case to the IRS's Art Appraisal Services unit for possible review by the Commissioner's Art Advisory Panel. The Panel is a group of outside museum curators, scholars, and dealers who meet twice a year in closed session to evaluate submitted appraisals without knowing the taxpayer's identity.

The Panel's opinion is advisory — it goes back to the IRS's own appraisers, who decide whether to adopt it. In its most recently published report, the Panel reviewed 195 items with a combined taxpayer-claimed value of roughly $795.5 million and recommended adjustments on 92 of them, a net change of about 2% overall. The point for an estate isn't the size of that adjustment; it's that a documented, defensible valuation matters more as the number on the appraisal grows.

What the appraiser is actually looking at

An appraisal weighs the same variables IRS guidance flags for any donated or inherited artwork: physical condition and any restoration, the medium and scale, and — critically — authenticity. The IRS's own guidance notes that a professional appraiser is expected to use reasonable due diligence to confirm authorship, which can mean checking a catalogue raisonné, a foundation's records, or a certificate of authenticity issued by the artist or a recognized authority.

That last point is where documentation and appraisal meet without being the same thing. A certificate of authenticity establishes who made a work — it does not set a dollar figure. An appraisal is the separate, independent step that turns that documentation, plus comparable sales and condition, into a supportable value. Settling an estate typically calls for both: the certificate to confirm what a piece is, and the appraisal to say what it is worth.

A different system, a similar idea: Brazil's inventário

Outside the U.S., asset valuation for an estate follows the local probate framework rather than the IRS's rules. In Brazil, the Código de Processo Civil governs the judicial inventário: under Article 630, once the list of estate assets is filed and any objection to it is resolved, the judge appoints a perito — a court-designated appraiser — to value the estate's property when no standing judicial appraiser is available in that jurisdiction. It plays a structurally similar role to a qualified appraiser in the U.S., without USPAP or an IRS-style review panel behind it: a neutral, court-sanctioned party sets the number heirs and the court work from.

The mechanism differs by country; the underlying question does not. Whoever inherits a piece — in Brasília or anywhere else — eventually needs someone independent of the family to say, in writing, what it is worth and why.

This text is informational and is not tax or legal advice; consult a qualified appraiser and attorney in your jurisdiction.

From the studio

From the atelier

I don't appraise the work that leaves this studio, and I wouldn't want a collector to treat anything I say about a piece as if I had. What I do control is the paper trail: every acquisition goes out with a signed Certificate of Authenticity carrying its Archive ID, medium, and dimensions, alongside the Acquisition Agreement and invoice that record the sale. None of it was built with an eventual estate appraisal in mind — it exists so a collector always has proof of what they bought and from whom — but it happens to be the same starting file an appraiser would eventually ask to see: what the work is, who made it, and when it changed hands.

If a family ever needs that documentation years from now, for their own estate or their accountant's, I keep the underlying records and can reissue what's needed. Setting the value itself is a separate, independent step — and it should stay that way.

Frequently asked

What does "fair market value" mean for an inherited artwork?

It is the IRS's standard definition: the price a work would sell for between a willing buyer and a willing seller, with neither under pressure to act and both reasonably informed about the piece. It comes from IRS Publication 561 and applies across income, gift, and estate tax contexts. For an estate, that value is generally fixed as of the date of death, unless the executor elects the alternate valuation date six months later for the estate as a whole.

Does every inherited painting need a formal appraisal?

Not necessarily — a modest piece may not need one for tax purposes at all. But once a work's value is significant relative to the estate, or the number could plausibly be questioned, a written appraisal from a qualified, USPAP-compliant appraiser is the standard way to support it. Organizations like the American Society of Appraisers can help locate someone credentialed specifically in fine art rather than general personal property.

What is the IRS Art Advisory Panel, and when does it get involved?

It is a panel of outside museum curators, scholars, and dealers who advise the IRS's Art Appraisal Services unit. When an audited return includes an appraisal for a single artwork valued at $50,000 or more — on an income, estate, or gift tax return — the case is generally referred for possible Panel review. The Panel's recommendation is advisory; the IRS's own appraisers decide whether to adopt it.

Is a certificate of authenticity the same as an appraisal?

No. A certificate of authenticity documents who made a work; an appraisal estimates what it is worth. IRS guidance notes that appraisers are expected to independently confirm authenticity, sometimes using a certificate as one piece of supporting evidence, but the certificate itself does not establish a dollar value. An estate typically needs both documents, not one in place of the other.

Can an executor choose a later date to value the artwork?

Yes, within limits. Under Section 2032 of the tax code, an executor can elect the alternate valuation date, six months after death, but only for the entire gross estate at once — never for a single painting in isolation — and only if the election lowers the estate's total value and the tax owed. A piece sold or distributed within that six-month window is valued as of that transaction instead.

How does estate valuation of art work outside the United States, for example in Brazil?

The framework differs but the role is similar. Under Brazil's Código de Processo Civil, a judge overseeing an inventário appoints a perito — a court-designated appraiser — to value the estate's assets, including works of art, when there is no standing judicial appraiser in that jurisdiction. There is no USPAP or IRS-style review panel behind it, but the underlying idea is the same: an independent party sets the value the heirs work from.

Need documentation for an appraiser or an executor?

If you or a family member is settling an estate that includes a piece from Perfeito Studio, send us the Archive ID and we'll confirm the Certificate of Authenticity, Acquisition Agreement, and invoice on file.

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