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For a 706, Reg 20.2031-6 requires an appraisal for artwork valued in excess of $3,000. If under the will (trust) there is a specific bequest of the art to a charity, what is the downside of not having an appraisal? Since it is a specific bequest, shouldn't the schedule O deduction be whatever value is included in the gross estate so there is no chance of an understatement of tax?
Thanks for your input.
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| A preparer could conceivably be penalized for preparing a return without the required "qualified appraisal" for an item reported therein. Under these new preparer penalty regs (which apply to estate tax return preparers), the penalty can be a varying % of the greater of the tax understatement or the preparer's fee. That's at least one downside.
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