Kawai worth

[Bradley M. Snook]

> Eric Frankson:
> Desert Piano, Rancho Mirage, CA

> I hadn't thought of the legal ramifications of misquoting piano estimates.
I've always used a 60 year life span for estimating the price of a grand (40
years for verticals).  If the piano was 30 years old, half of it's life is
over, so it would sell for half of what one sells for new.  Your KG-2E's
life is a 1/6th over, so I would estimate the retail value (not wholesale)
is worth 5/6th of a new  RX-2 ($21,500 average price found in Larry Fine's
Piano Book price guidline) or $17,845 in mint condition.  But realistically,
a $12,000 to $14,000 price tag is much more realistic in today's retail
environment.  Most dealers would take $20,000 for a new RX-2, which makes
the $20,000 price estimate for a KG-2E as a bit wishfull.  But, as always,
"Buyer Beware".
>

Sure, I think that your method of appraisal is a good standard from which to
work. The thing is that Ed Foote has been asked to evaluate a KG-2E for
donation purposes. In other words, I am assuming that his client would
really like to see the highest FMV as possible; the higher the value, the
more the client can deduct from their taxes.

I completely agree that $20,000 would be VERY wishful thinking, but that was
just a number that he said a dealer mentioned to him. He should not
overvalue the piano; that could start problems with the IRS. I just do not
know if $12,000 is being fair to the client based on the description of the
piano. Personally, I would start setting the FMV somewhere around $15,000
for tax purposes. But there is good argument for a few thousand dollars in
either direction. Again, if someone asked me how much I thought they should
pay for that piano, most likely I would recommend something like $10,000.
This situation simply has a different set of criteria . . .

I am interested to know how others would appraise a piano like that for 'tax
purposes.' It really comes down to how the IRS's definition of FMV is
interpreted, and what the implied responsibilities the IRS puts on the
appraiser. I wonder if the IRS has published any further guidelines
specifically for the appraiser?

Bradley M. Snook