The value of an antique coffee grinder, or any other item of value, can best be demonstrated by obtaining a letter of appraisal from a professional appraiser. Appraisers, however, use various approaches to valuation, based on the specific purpose of the appraisal.
A letter of appraisal is a legal document which gives the value of an item in the opinion of a trained professional appraiser. When a person seeks valuation of an item for IRS estate tax and donation purposes, the appraiser assesses the item at its fair market value. When valuation is sought for a divorce settlement or equitable distribution of an estate, the appraiser uses a marketable cash value approach. This valuation represents the actual proceeds that will be paid to the seller after the sale, which are in some cases 25 percent to 30 percent less than the sale or auction price.
In the case of loss or theft provisions for casualty insurance policies, the appraiser provides the replacement value, which is generally higher than fair market value. For bankruptcies, the appraiser usually assesses the liquidation value. This is the sales revenue achieved within an immediate and specified time, and it is the lowest valuation that can be assigned. A fifth type of valuation, actual cash value, is based on loss replacement less depreciation and is typically used for equipment which devalues over time.