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AI Alerts Valuation Professionals Of Noteworthy Court Decisions

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Mike Kennedy

Elite Member
Joined
Sep 28, 2003
Professional Status
Certified Residential Appraiser
State
New York
AI Alerts Valuation Professionals of Noteworthy Court Decisions
The Appraisal Institute on Oct. 17 highlighted two recent court rulings that may be of interest to valuation professionals.

The first case, US Bank, National Association vs. USB Real Estate Securities, Inc., was filed Sept. 6 in the U.S. District Court Southern District of New York and focused on the use of automated valuation models instead of credentialed real estate appraisers. In this decision, the court rejected exclusive reliance upon an AVM analysis as a basis for recalculating LTV ratio, citing limited utility of an AVM for valuing a particular residential property.

The second case, Cave Buttes, LLC v. Commissioner of Internal Revenue, was filed Sept. 20 in the U.S Tax Court and weighed in favor of the taxpayer on several issues, including the definitions of qualified appraiser, qualified appraisal and fair market value.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
thanks, good information and post!
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
The Cave Buttes is a real study in poor appraising nevertheless it prevailed. Helper not signing despite IRS rule. Using non-IRS MV definition. Dates not matching. etc etc. The court may rightly agree with the value, but the appraisal must have been pathetic to make such fundamental errors that result from not reading a few simple things from the IRS and/or many treatises or books that cover this issue.

Following up on a case cited above...don't value the buildings if the donation is actually shares in an LLC that owns the buildings... It is not the same thing.

http://www.ustaxcourt.gov/InOpHistoric/estofevenchik.TCM.WPD.pdf
 
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