Donations Appraisal

The current tax laws instituted by the IRS, governing non cash charitable contributions can feel opaque and confusing even for tax professionals specialized in the code. For the sake of brevity and intentionally steering away from specific tax or legal advice, our suggestion would be to contact an attorney, tax account or financial planner if you are considering making a non-cash contribution. 

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For exact information regarding the IRS mandates for non-cash charitable contributions see publication 526 (2020), Charitable Contributions or go to IRS.gov/Pub526. This publication explains how individuals claim a deduction for charitable contributions. It discusses the types of organizations to which you can make deductible charitable contributions and the types of contributions you can deduct. It also explains what constitutes a qualified institution, IRS requirements for donations with $5000,00 or more, deduction limits against one’s gross annual income. It also discusses how much you can deduct, what records you must keep, and how to report charitable contributions. A charitable contribution is a donation or gift to, or for the use of, a qualified organization. It is voluntary and is made without getting, or expecting to get, anything of equal value.

I if you do contribute more than $500 worth of non-cash donations in a tax year, you’ll need to fill out Form 8283. This form requires you to put more information about your non-tax donations together. Here is where the appraisal comes in handy, for items that have fair market value(FMV) of than $5,000 or more, In this case, you’ll need to get an appraisal of the item to include with your tax records. It should also be duly noted that donors of property with a FMV of $20,000 or more must submit an appraisal when filing their taxes if they claim a tax deduction. 

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If you have questions about the appraisal process, feel free to contact us, we will try our best to offer you help.