How is personal property valued?
Most personal property assessments are based on the information presented on personal property statements or affidavits. These are documents filed by the property owner and given to the person making the assessment (i.e., the assessor). The assessor uses the reported cost figures to determine the assessed value. If detailed documents concerning the property are not provided, the assessor estimates the property’s value using acceptable appraisal data and techniques, taking into consideration age, cost, and type of property.
Personal property should be assessed whenever you are planning on selling it. This is because you may be selling it for more or less than its actual value. Personal property will also usually need to be assessed if you are insuring the property or transferring the property over to a trust or business.
Personal property tax rates may be different from tax rates for real property, they may also be the same. Personal property falls into the capital gains and losses portion of your taxes. If you lose money during the sale of personal property, the loss can be deducted from your taxes as a capital loss. Additionally, if an item of personal property has increased in value when you transferred it to a trust, you will want the advantage of the new basis if you ever sell the personal property.
When looking for an assessor, you will usually want to hire one with a specialty relating to the personal property item. For instance, if you are having a car from your classic car collection assessed, you’ll want to hire an antique car assessor. If you are having a piece of artwork assessed, you’ll need an art and antiquity assessor.
The most important thing to remember when having personal property assessed is to get the assessment in writing. If you have any further questions about personal property assessments and the affect of personal property sales in relation to capital gains and losses, contact a tax specialist or tax attorney.