Is replacement cost the same as fair market value for household goods?
No. IRS Publication 561 cautions that replacement cost alone usually does not establish fair market value, because it ignores how buyers actually price used property. Presenting purchase receipts or insurance schedules as value evidence commonly overstates estate, donation, and litigation values and invites IRS or court adjustment.
Why are household goods valued item by item rather than room by room?
Because lump-sum entries like living room furniture are weak and easily challenged. Courts and tax authorities weigh original cost, age, brand, condition, and utility at the item level, and professional standards call for valuing significant items individually at current market prices with specific market references.
Where does market data for used household contents come from?
There is no universal price guide for everyday furnishings, so values draw on actual transaction markets: general auctions, estate sales, consignment stores, resale marketplaces, and current retail catalogs. A credible report discloses the specific venues and dates used for each class of item.
How does the cost approach work for household goods?
It starts from the current replacement price of a comparable new item, then applies depreciation through index and percent-good factors reflecting physical wear, functional issues, and market desirability, rather than simply subtracting a fixed amount per year of age.
Is there one required formula for valuing household goods?
No. The cost, sales comparison, and income approaches are the accepted frameworks, but statutory value definitions and depreciation schedules vary by state and by purpose (tax, insurance, litigation, donation), so a flat percentage-of-purchase-price rule applied everywhere is not defensible.