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Thank you for using Just Answer. I understand you have a question about the basis of a rare item.
If this is a very expensive item, you might want to contract with a forensic appraiser. He (or she) would use the history of prices of similar items, and the relative status (I don't know the technical term, but this indicates whether there is an damage), to determine it's value the last time it was inherited.
As you may know, when an item is inherited, its basis is changed to the value at the date of death (with a minor exception in 2010).
Other than that, you are probably on the right track, although it would require an expert to determine the adjustments for the price of "similar items" to determine the value of your item.
If an estate tax return was required the last time it was inherited, there should have been a value assigned on that return, and possibly an apparaisal.
my first attempt at guessing a value was to go to the watch expert at Bonhams were it was sold. He would not hazard a guess as to basis but gave me two web sites that were of limited value. This time piece was made in England by Isaac Symmes One of the very first watch makers in England The watch was most likely made after 1604 when he finished his apprenticeship, although it has a spurious date of 1536 stamped on the case. Would you happen to know where I might find a listing of forensic appraisers?
I don't have a list of forensic appraisers, or a pointer to such a list. If Bonhams will not make a recommendation, you might try looking for (non-forensic) appraisers, and ask who they would recommend as a forensic appraiser. A quick web search ("forensic appraiser" timepiece tax) found two possible appraisers, but I'm sure that is not the best way to go. Due to Just Answer restrictions, if I had a specific appraiser I would be willing to recommend, I could not do so here.
Well, thanks for your efforts. I forgot to mention that the piece was given to my wife from her mother around 1990. Well before the womens death. So the was no apprazel at that time. Again, thanks for your help.
If it was valued more than the gift tax limit at the time ($10,000), your wife's mother should have filed a gift tax return. But, it's unlikely that there was. That would report the estimated value in 1990, which would be another data point for the appraiser.
Sorry, it was $3,000 then. $10,000 went into effect around 1997.