IRS Definition of FMR

[jay trotta]

Steve

Most Estates we do are Retrospective, therefore we would need to assume a Buyer, is ready; willing; and able to purchase the day we are there. In my 20 years of practice I have never let any guidelines go unaddressed - FNMA or USPAP, I assume they are part of the everyday business we practice....no ??? Is there some reason, because it is for the IRS, we should practice our profession differently ??

 

[Kali the Boston Terrier]

In the course of your engagement letter and developing your SOW with the client you do not ask that it might be used for Federal Income Tax purposes, well then you deserve the wrath that comes from the 4th branch of the Gov't.

The IRS does have specific guidelines, the fact you do not know this after 20 years of appraising is kind of scary. Do you use FNMA guidelines when you do litigation appraisals too? Some of my favorite expert witness moments is when an appraiser comes to the stand with his URAR and all his FNMA guidelines. First question from opposing counsel "..are we FNMA?"

The fairly sad part that most appraisers do not even realize that FNMA is a set of guidelines for a specific user, for a specific purpose. Just like FNMA has guidelined for residential refi's, purchases, and REOs. The IRS also has specific guidelines...and so does USDA, DoD, VA, US Marshals...Dept. of Transportation...Tax Courts...Bankruptcy Courts.

Show up to these places with your FNMA guidelines...then sing that tune again. BTW FNMA guidelines are not USPAP...two different documents entirely.

 

[Fred]

If it is retro, then that would be a big clue that it is for taxes and you might want to (at least) reference FMV.

 

[PropertyEconomics]

http://www.irs.gov/businesses/small/article/0,,id=108143,00.html#7

I suggest using this definition if it is for extate taxes ... the IRS will reject the report if not done properly and the appraiser will look like a fool to their client. It is our responsibility to at least ask the question and then use the proper definition based upon the scope of work.

 

[jay trotta]

BK
"The fairly sad part that most appraisers do not even realize that FNMA is a set of guidelines for a specific user, for a specific purpose. Just like FNMA has guidelined for residential refi's, purchases, and REOs. The IRS also has specific guidelines...and so does USDA, DoD, VA, US Marshals...Dept. of Transportation...Tax Courts...Bankruptcy Courts".

So, what you are telling me is that you do not employ any portion of FNMA in your other work ? After all the conversations on this forum in regards to claims by other appraisers that they review appraisals from others and then cannot separate "numbers" (subconsicously-SP don't care), You are the master of "separation" of "Guidelines" no less.
Yes they all have various different guidelines, but similarity's run deep in this business, perhaps Mich. courts are different, but can you tell me the last time You were in court on an IRS Tax appraisal ??

PS: Under FNMA guidelines, it requires that you include "Certifications" with your appraisal - Form or Narrative reports, am I to assume You do not, because it's an IRS Tax request ?? Limiting Conditions ??

 

[Kali the Boston Terrier]

PS: Under FNMA guidelines, it requires that you include "Certifications" with your appraisal - Form or Narrative reports, am I to assume You do not, because it's an IRS Tax request ?? Limiting Conditions ??

Its a USPAP guideline for a signed certification, not FNMA. and yes I do because its a USPAP requirement. Do you actually understand that there are two different documents?

Why do you feel it neccessary to use FNMA guidelines for anything besides FNMA work?

Why would I use FNMA guidelines for work other than FNMA work? I could understand for other finance related stuff, like VA and REO...but why would I with an Apartment building or a conservation easement, they are not relevant.

Thank goodness I have not been in court for an IRS tax issue, if that were the case I would have made a serious error in the appraisal report preparation...like the use of MV vs. FMV or some other guideline that some do not feel apply to them. Michigan's rules of evidence are in no way similar to that of FNMA guidelines, and reflect very little in actual valuation methodology IMO.

 

[Dan/Fla]

If you want another defination of value, What form are you usinf, I asked this due to if using the URAR most of us use today The definition of market value is preprinted (making it hard to white out) on page 4. if using the older URAR the defination is on the limiting conditions. I guess my question is if using normal forms. How do you not confuse the reader with Multi definitions?

 

[Kali the Boston Terrier]

You should never use the FNMA forms for anything besides FNMA financial work. Everything else should be done on AI Summary Forms, Wintotal GP forms or as a narrative.

Using those forms for litigation or estate work is usually the first dead give away that you have never done one of these before.

 

[PropertyEconomics]

You should never use the FNMA forms for anything besides FNMA financial work. Everything else should be done on AI Summary Forms, Wintotal GP forms or as a narrative.

Using those forms for litigation or estate work is usually the first dead give away that you have never done one of these before.

Brian .. I fear we are seeing many that "think" they have a full and complete handle on thier job when in fact they havent expanded their business enough to even know the differences that exist.
Thats ok, let them turn in one of those forms to the IRS and then let the IRS tell the taxpayer they have rejected the appraisal. How happy do you think the client will be then.

A word to the wise ... if you dont know the differences in value definitions, the reasons for using different forms, the differences in reporting, .... stick with mortgage work ... diversity doesnt appear to be for you.

 

[jay trotta]

BK / PE

similarities run deep in this business; USPAP is not the "end all" paper....


"PE-Brian .. I fear we are seeing many that "think" they have a full and complete handle on thier job when in fact they havent expanded their business enough to even know the differences that exist."


ROFL