Appraisals
Taxpayers need to be prepared to support all high valued property deductions with a detailed proof of cost, the date of acquisition and how the value was appraised. If you are claiming a deduction exceeding $5,000 for an item, or for a similar group of items (baseball card collection, art pieces, coins, etc…), you generally need a written appraisal from a qualified appraiser. The appraiser must be unrelated to the party claiming the deduction, and sign a declaration on Form 8283 that they meet the requirements of a qualified appraiser. The appraisal must also be within 60 days of the date of your donation.

If donating the gross proceeds from a sale of publicly traded securities, non-publicly traded securities of $10,000 or less, intellectual property, business inventory or vehicles, an appraisal would not be required per an exception to the appraisal rule. All deductions exceeding $500,000 require an appraisal under all circumstances.

Substantiation Requirements

  1. Cash Contributions - The IRS has tightened their standards when it comes to cash contributions, checks, credit cards and exchange-traded fund (ETF) transfers. Regardless of the amount, they must be substantiated by a canceled check or a bank or credit card statement. A receipt from the charity showing the name of the charity, date and amount of the contribution is highly recommended.
  2. Non-cash contributions under $250 - A dated receipt from the charity containing a detailed description of the property is preferred. If depositing an item such as clothes at an organization's drop site and no receipt is available, proper documentation will be acceptable.
  3. Contributions of $250 or more - Requires a written receipt or acknowledgement from the charity. You may not rely on a bank statement or canceled check to satisfy the records requirement.
  4. Donations exceeding $500 (cars, boats, airplanes, motor vehicles) - Requires a written acknowledgement from the charity on Form 1098-C. Taxpayers will need to attach Form 8283 to their tax return or the IRS may disallow the deduction.
  5. Property deductions exceeding $5,000 - Written appraisal is required from a qualified appraiser.


Charitable Contributions by Business Entities

Related Articles
  1. Investing

    Find the Right Home Appraiser: A Quick Guide

    Locating the best home appraiser can mean a house valuation that's thousands of dollars higher than one that's done on the cheap.
  2. Managing Wealth

    The Home Appraisal: Your Key to a Successful Refinance

    When you refinance your mortgage, everything hinges on the appraisal. Here's what appraisers look at, how to make your home look as valuable as possible and ways to fight back if the valuation ...
  3. Investing

    How To Challenge A Low Home Appraisal

    If you're unhappy with your home appraisal, here are some steps you can take.
  4. Retirement

    Your Heirloom Jewelry: How Much Is It Worth?

    You grandma's diamonds are now yours. Whether you plan to keep them or not, you first need an honest appraisal. Here's how to get one.
  5. Investing

    6 Tips For Protecting Your Home's Value

    New taxes, property values, appraisals, community changes and nearby abandoned foreclosures can all lower your home's value. Take proactive steps to protect it.
  6. Managing Wealth

    Evaluating An Heirloom

    Whether it's jewelry, furniture or a book collection, once you inherit it you need to decide what to do with it. First, find out what it's worth.
  7. Taxes

    6 Reasons to Donate Your Car to Charity

    It's no longer a free ride, but there are still tax benefits to doing so.
  8. Taxes

    Tips on Charitable Contributions: Limits and Taxes

    An overview of the limits and tax deductions of charitable donations.
  9. Investing

    Homeowners Overestimating the Value of Their Homes

    A new survey by Quicken Loans shows homeowners often have a lofty expectation of their home's value.
Frequently Asked Questions
  1. What are the Differences Among a Real Estate Agent, a broker and a Realtor?

    Learn how agents, realtors, and brokers are often considered the same, but in reality, these real estate positions have different ...
  2. What is the difference between amortization and depreciation?

    Because very few assets last forever, one of the main principles of accrual accounting requires that an asset's cost be proportionally ...
  3. Which is better, a fixed or variable rate loan?

    A variable interest rate loan is a loan in which the interest rate charged on the outstanding balance varies as market interest ...
  4. What is the 1003 mortgage application form?

    Learn about the 1003 mortgage application form, what information it requires and why this form is the industry standard for ...
Trading Center