IRS Publication 561: Determining The Value Of Donated Property

Dictionary Says

Definition of 'IRS Publication 561: Determining The Value Of Donated Property'


A document published by the Internal Revenue Service (IRS) that provides taxpayers with information on how to determine the fair market value (FMV) or appraisal value for property donated to a qualified organization. Taxpayers can donate a wide variety of property, including used clothing, art, real estate, securities, patents and business inventory.

Certain donated items, such as pieces of art, may be valued higher than others and allow the taxpayer to claim a much higher deduction than usual. These items may carry extra reporting requirements, such as photographs and a qualified appraisal letter.

Investopedia Says

Investopedia explains 'IRS Publication 561: Determining The Value Of Donated Property'


Determining the fair market value of an item or piece of property can be difficult because there is no single (or simple) way in which it is set. A good indicator of the fair market value is the price the item or property fetches when sold by the organization the donor gave it to. Another method is to compare the price of the item to the sales price of a similar item.

IRS Publication 561 does not provide donors with information on how to determine the amount of a donation that can be deducted, what records the donor should keep or how to substantiate the appraisal claim. More information on those matters are available in IRS Publication 526, Charitable Contributions.

comments powered by Disqus
Hot Definitions
  1. Legal Monopoly

    A company that is operating as a monopoly under a government mandate. A legal monopoly offers a specific product or service at a regulated price and can either be independently run and government regulated, or government run and regulated.
  2. Closed-End Fund

    A closed-end fund is a publicly traded investment company that raises a fixed amount of capital through an initial public offering (IPO). The fund is then structured, listed and traded like a stock on a stock exchange.
  3. Payday Loan

    A type of short-term borrowing where an individual borrows a small amount at a very high rate of interest. The borrower typically writes a post-dated personal check in the amount they wish to borrow plus a fee in exchange for cash.
  4. Securitization

    The process through which an issuer creates a financial instrument by combining other financial assets and then marketing different tiers of the repackaged instruments to investors.
  5. Economic Forecasting

    The process of attempting to predict the future condition of the economy. This involves the use of statistical models utilizing variables sometimes called indicators.
  6. Chicago Mercantile Exchange - CME

    The world's second-largest exchange for futures and options on futures and the largest in the U.S. Trading involves mostly futures on interest rates, currency, equities, stock indices and agricultural products.
Trading Center