Sorry for my error below, in the “For comps with bugs” 3rd paragraph belowk, “1) recent donations…” should have read: “1) recent sales…”

 

From: Entomological Collections Network Listserve [mailto:[log in to unmask]] On Behalf Of William B. Warner
Sent: Saturday, January 4, 2020 1:22 PM
To: [log in to unmask]
Subject: FMV vs. replacement value; RE: vouchering query: Types deposited in private collections

 

Off the original subject here, but:  There seems to be a persistent misunderstanding of “Fair Market Value” amongst collections administrators, who are asked to place values on donations for their administation, vs. donors that have to place a FMV on their collections in able to write off the donation for taxes.  Note that there is really no difference between donated bugs and any other donated property other than real estate where more formal statues exist.   In the case of a donee institution receiving donations and being required to place a value on them for administrators, it would be best to view that case the same as someone establishing an “insurance value” on art or jewelry, because the replacement cost of the property comes into play.  For the donor, fair market value (basically what a willing buyer would pay a willing seller in an unforced situation), NOT replacement value (i.e. what it would cost you to replace the item if lost) is required, and if the total donation of like items (i.e. all the bugs a donor donates in a given year, no mater to how many institutions) exceeds $5000, the donor is required to get an appraisal from an independent appraiser.  Just like for real estate, jewelry, cars, art, etc., that appraisal better be supported by an analysis of comps if challenged by the IRS.  IT IS ILLEGAL for the donee to establish FMV for a donor, so again there are two different processes here, and the actual numbers are usually larger for replacement value than for FMV.  So, it might be best to keep such “replacement values” as an internal number, or if you want to inform donors, make sure that you very distinctly label such numbers as your internal valuation for replacement value only and that you are definitely not trying to establish FMV for them to use with IRS.

 

There is also much misunderstanding of FMV by donors, who sometimes mistake replacement value estimations by institutions as FMV; I’ve even had friends occasionally say how thay like one or another institution because they “give me higher value for my donation!!”  If challenged, I’d hate to be that donor (or donee worrying about their administrators’ wrath) trying to explain that situation in front of an administrative law judge!!  Ditto for an appraiser that provides an out-of-whack high appraisal value!

 

For comps with bugs, your choices basically boil down to: 1) recent donations of whole collections (this is both an uncommon situation, and actual prices paid are usually not public information), and 2) pricing information readily available from insect dealers, online auctions, etc.  Those change over time, so the information needs to be captured in the case file at least for the donation year in order to provide comps if IRS challenges the FMV (for estates, the number apparently expires 6 months from date of death).  Also, nearly all vendors have large discounts (sometimes 25-50%) for large orders on the magnitude of larger donations, so in an appraiser’s analysis a big donation needs to be reasonably discounted for FMV.  On the bright side, check out Bioquip’s price list (or that of any of the dozens of other dealers) and you will rarely see prices below $5 for a single identified specimen of any insect.  And some of the collectable, showy species can go for $X00 or more apiece (i.e. fire your appraiser if they value your drawer of rare Chrysina or Morpho or giant dynastines at $5 each). 

 

So, donors, make sure you (if under $5k) use FMV (including a defendable discount, not straight-line value from a pricelist), maintain comps annually at least until the statutory time limit expires for that tax year, and if over $5K, make sure your appraiser maintains a good case file with the comps, uses an actual analysis of FMV (not straight-line pricing) that includes discounts…and is willing to show up in court to defend their analyses if it comes to that.  (And appraisers, note you have both statutory and civil liability for misrepresentation in your appraisals—less onorus than a real estate appraiser, but no different than an art appraisor; you could be sued by donors for malpractice!!) 

 

For institutions:  If I was a collections manager or curator being required to place value on donations by administrators, I would use replacement cost, not FMV; again, donation value and replacement value are different numbers for different uses!

 

Cheers,

Bill

 

From: Entomological Collections Network Listserve [mailto:[log in to unmask]] On Behalf Of Furth, David
Sent: Saturday, January 4, 2020 11:24 AM
To: [log in to unmask]
Subject: Re: vouchering query: Types deposited in private collections

 

The U.S. Internal Revenue (IRS) official who spoke at an ECN meeting years ago told us that although he understands that some specimens (e.g., types) may be considered more valuable, they (IRS) only consider evaluation at a "fair market value", i.e. money of similar value being exchanged for a similar item (e.g., from catalogs, auctions, etc.).  Generally it is not a good idea to assign values for institutional collections, but some are forced to do so by administrators.  However, a good, presumably legal case with IRS, could be made to factoring in the resources necessary to re-collect the specimens, if they even can be.  But such a process would be extremely laborious.

 

Many of us have experienced not being to access a type in a private collection and we are forced to write in our publications that " ..access to the type was not possible..."  The reasons for such inaccessibility in "private" collections are variable, e.g., embarrassment about the collection condition, presence of material collected illegally or belonging to others, professional jealousy or dislike of certain colleagues, etc..  By private I mean an individual not a private institution (e.g., MCZ, Field Museum, AMNH, etc., etc.).  Even institutions that do not loan types can be visited - it's not the same as an individual refusing access to types in their collection.

 

There should be some initiatives to start to deal with some of these issues (e.g., vouchering, types, private vs public collections, valuation of collections, etc.) across the discipline,perhaps from places like Australia that have.  Good topics for the next ECN meeting.

 


From: Entomological Collections Network Listserve <[log in to unmask]> on behalf of James Kenneth Liebherr <[log in to unmask]>
Sent: Saturday, January 4, 2020 11:47 AM
To: [log in to unmask] <[log in to unmask]>
Subject: Re: vouchering query: Types deposited in private collections

 

External Email - Exercise Caution

The question of collection valuation via a vis types  is somewhat counterintuitive. We've valued the CUIC at somewhere near $50-75M US depending on subjective criteria such as rarity. BUT, the vast majority of value is represented by authoritatively determined specimens. Cornell has somewhere over 7500 species represented by types, primary or secondary. Using standard valuations, those type specimens amount to about $1-2M US; surprising little, at least to me, of the total. Our infrastructure--only cabinets and drawers--is even less; perhaps $1M (not counting building cost and maintenance). So the argument that a private individual should be able to maintain a private type collection to recoup--upon death or sale--their outlay for collecting and preparing specimens does not hold water. It would be much safer to insist that upon publication, holotypes are deposited in an institutional collection. Of course, countries such as Australia have their act together on this issue by insisting on such deposition.

Jim Liebherr

Curator (ret.)

Cornell University Insect Collection


From: Entomological Collections Network Listserve <[log in to unmask]> on behalf of Robert Anderson <[log in to unmask]>
Sent: Friday, January 3, 2020 3:14 PM
To: [log in to unmask] <[log in to unmask]>
Subject: Re: vouchering query: Types deposited in private collections

 

A number of years ago there was a move for all holders of private collections to “register” their collections with an institution.  This was done to ensure that private collections, upon the death of the owner, would not fall through the cracks and be lost.  Perhaps this idea needs to be resurrected?

Recently the Elbert Sleeper private weevil collection (including types), not previously accessible to anyone, was donated to the California Academy of Sciences.  Chris Grinter, collection manager for the CAS, will have more details, but it’s my understanding that this donation was delayed for sufficient time for dermestid damage to have taken place such that many of the larger specimens were destroyed. The donation may also have come very close to not happening at all with the family unsure what to do with it for some time prior to the donation. This is the fate risked when advance plans are not made for private collections to pass to a public institution upon death of the owner.  

I edit for Zootaxa and deal with all type depositions on a case by case basis. I encourage deposition in a public institution but if an author makes a strong case for a private institution I will accept that.

One argument I heard that I do not like is that many people pursue taxonomy as a hobby and do not get paid for it.  They spend much money on building, curating and storing a personal collection and that the one way such an individual can get reimbursed for this investment is to sell their collection. And since collections with more types sell for more money there is a reason to house types in their private collections.  Such is textbook conflict of interest as a taxonomist can oversplit in order to get more types thus increasing the value of their collection.  

Cheers, Bob


From: Entomological Collections Network Listserve <[log in to unmask]> on behalf of Max Barclay <[log in to unmask]>
Sent: January 3, 2020 9:22:52 PM
To: [log in to unmask] <[log in to unmask]>
Subject: Re: vouchering query: Types deposited in private collections

 

I have to say as an editor and a collection manager, that I don't agree with the comment one person made that journals should 'require' (rather than 'recommend' like the ICZN Code does) that Types be deposited in an institution. This relies on an ideal-world belief that 'all institutions' are better managed and more accessible than 'all private collections' - and this is simply (sadly) not true. Some institutes have a near-total embargo on loaning types and are totally 'inaccessible to all science' unless you can afford to show up at the door - while some private collectors make their material very available. Think of Charlie and Lois O'Brien's private collection during their heyday, compared to certain major type-holding museums- and which you would rather consult a specimen from...?

 

I am editor in a journal that has a written policy against type deposition in private collections, and we lost a very good paper recently because a German expert did not want to deposit a unique holotype specimen away from his reference collection, because he was continuing to work on the group and did not want his own access to the taxon he described to be curtailed in future- his collection will pass to a major museum on his death, like Charlie's did, and he attends many international meetings, so the accessibility of the type (which was of course published in a different journal) is as good as most museums and better than some- so the only consequence of the 'rule' was that one journal shot itself in the foot and lost a good paper and some goodwill!

 

The life-span of a private collector is of course a tiny proportion of the life-span of a specimen, and most sensible collectors make arrangements for their collection to pass to what they judge to be a good institution, so in the end it is all the same. Of course many private individuals prefer to deposit their holotypes right away, and that is good (we gratefully received several at NHM this year, and they are well cared for and accessible) but it shouldn't be because a journal demands it. 

 

Max

 

 

 

 

 


Image removed by sender.

Saving the World with Evidence, Knowledge and Inspiration. (click to learn more)

Sauver le monde avec des preuves, des connaissances et de l'inspiration. (cliquez pour en savoir plus)

Image removed by sender.

 

cmn2019-10-04 to March 29, 2019.