by Ruth Crnkovich

What is your art worth? It depends.

Thanks to the popularity of reality TV and PBS’s Antiques Roadshow, people are much more aware of the benefits of a good appraisal. Yet putting a value on an object is not as straightforward as it appears to be, nor is it an easy undertaking, because there is no single, absolute value for anything. Everything has at least five different values.

As confusing as that may sound, understanding the five values for art and collectables is not too difficult. The five most basic values are Retail Replacement, Fair Market, Marketable Cash, Liquidation, and Scrap Value. The purpose for the appraisal dictates which approach to valuation the appraiser will use. In most cases, appraisers use the market data approach. Simply put, the market data approach means finding comparable prices for similar items.

The most common appraisal for Retail Replacement Value (RRV) is for insurance purposes. The RRV is the amount of money needed to replace an item if it were lost, damaged, stolen, or destroyed. It behooves both collectors and insurance companies to have current appraisals for valuable objects so that the items being insured have accurate values listed. If an item is undervalued on a scheduled insurance policy and there is a loss, the insurance company has no obligation to pay more than the amount for which the item is listed on the policy.


Andy Warhol (American, 1928–1987), Grace Kelly (II.305), 1984, Screenprint on paper, Edition 225, 41” x 33”


For the sake of illustration, I will compare five values for Andy Warhol’s Grace Kelly (II.305), 1984 print. If a collector originally purchased the print for $9,000 ten or fifteen years ago and added it to the insurance policy for the amount paid at that time, unless the print has been reappraised and the value changed in subsequent years, the print will be insured for the original purchase price. The problem comes along when there is a loss and the print needs to be replaced. Today, to replace Warhol’s Grace Kelly (II.305) with another one from this edition, the cost would exceed $115,000 in today’s art market.

If we take that same Grace Kelly (II.305) screenprint and donate it to a local museum, the IRS will allow for a Donation Tax Credit provided all stipulations for the tax credit are met. The IRS requires that the taxpayer use Fair Market Value (FMV). The FMV is the price for which an item would sell in the open market. In cases pertaining to the IRS, the open market is primarily the auction market because that information is available to the public. Gallery sales are not considered part of the open market because those sales are private and are not available to the public. Typically, an item sells at auction at a price lower than it sells for in a retail gallery. When the market data approach is used for IRS purposes, the same Warhol print has a FMV of $68,000 to $85,000.

In situations of Equitable Distribution, such as in divorce cases and estate settlements, or Asset Management, Marketable Cash Value (MCV) is used to determine the final net for the object sold. Finding the FMV then deducting all of the cost associated with selling the item arrives at the MCV. The cost associated with selling a valuable object can be significant.

 On average, auction houses require sellers to pay 25 percent of the hammer price for items sold. If our Warhol print sells at auction for $80,000, the seller would be required to pay $20,000 commission to the auction house, leaving the seller with $60,000 less the cost of shipping, catalog photography, and insurance. A second cost associated with selling an artwork is Capital Gains Tax, which can be as high as 28 percent of the net profit. After paying the tax, the amount the collector actually nets is less than $44,600, which is well below the value quoted for the insurance appraisal.

In the past few years, we have seen a rise in forced sales of assets by banks, corporations, and personal bankruptcies. In this situation, the items being sold are forced to be offered for immediate sale with no minimum price requirements. The Liquidation Value (LV) takes into consideration how a forced sale affects the value of the object.

When there are more objects for sale than there are potential buyers, it is not unusual for the value to be reduced to pennies on the dollar.

Hypothetically, what that means for Grace Kelly is that some lucky buyer will likely purchase the print well below FMV and RRV market price. In this situation the LV may be $25,000.

 Rarely is Scrap Value (SV) applied to art, but it can be. SV is most often applied to jewelry, silver, cars, or other recyclable materials. In the event Grace Kelly was damaged or partially destroyed, the SV would be $0 since there is no market for a single sheet of scrap paper.

 A properly executed and knowledgeable appraisal truly affects the value of an object. Chances are, at some point you will need an appraisal. Understanding how the five different markets affect value will help protect you and your valuables.


For more discussion about valuing art, you can visit CRN Fine Art on Facebook or email specific questions to Ruth Crnkovich, Fine Art Appraiser at



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