When you donate property worth more than $500 to charity, you'll likely need to complete IRS Form 8283. For donations exceeding $5,000, the IRS requires a qualified appraisal from a qualified appraiser. Understanding these requirements helps you claim your charitable deduction while avoiding costly IRS audits and penalties.
The key threshold to remember is simple: donations over $5,000 require Section B of Form 8283 plus a qualified appraisal. Art donations over $20,000 need the complete appraisal attached to your tax return. Missing these requirements can result in your entire deduction being disallowed.
Quick Answer: You need a qualified appraisal for any noncash charitable donation valued over $5,000, plus specific documentation requirements that vary by donation type and value.
This guide walks you through exactly when appraisals are required, what makes an appraisal "qualified" under IRS rules, and how to ensure your documentation meets federal standards.
The IRS sets clear thresholds for when you need professional appraisals. Any single item or group of similar items donated with a claimed value over $5,000 requires both Section B of Form 8283 and a qualified appraisal from a qualified appraiser.
Special situations require appraisals even at lower values. Single clothing items or household goods not in good condition need qualified appraisals if you claim more than $500. Art donations valued at $20,000 or more must include the complete signed appraisal report with your tax return.
The "similar items" rule catches many donors off guard. If you donate books worth $2,000 to College A, $2,500 to College B, and $900 to College C, the total $5,400 triggers Section B requirements for all three donations, even though each individual donation is under $5,000.
Donation ValueForm SectionAppraisal RequiredSpecial RulesUnder $500None requiredNoReceipt sufficient$500-$5,000Section ANoForm 8283 onlyOver $5,000Section BYesQualified appraisal mandatoryArt over $20,000Section BYesAttach complete appraisal
A qualified appraisal must meet specific IRS standards under Treasury Regulations section 1.170A-17. The document must follow Uniform Standards of Professional Appraisal Practice (USPAP) and be detailed enough that someone unfamiliar with the property could understand how you arrived at the valuation.
The appraisal must include twelve essential elements. These include a detailed property description, the valuation effective date, your qualifications as an appraiser, the specific valuation method used, and the appraised fair market value. You must also declare that the appraisal was prepared for income tax purposes.
Timing matters critically for qualified appraisals. The appraisal must be completed no earlier than 60 days before the donation date and no later than the tax return due date (including extensions). If your client plans to donate after the appraisal, they have exactly 60 days to complete the donation or the appraisal becomes invalid.
Important: The valuation effective date must be no earlier than 60 days before the contribution date and no later than the contribution date itself.
Not everyone can serve as a qualified appraiser for IRS purposes. You must meet specific education and experience requirements, regularly prepare appraisals for payment, and avoid several disqualifying relationships.
The IRS recognizes two paths to qualification. You can earn a recognized appraiser designation from a professional organization for the specific property type, or complete professional coursework plus have at least two years of experience valuing that property type.
Several relationships automatically disqualify you from appraising specific donations. You cannot appraise property for the donor, the receiving charity, or anyone who was party to the original transaction where the donor acquired the property. Family members and anyone who receives percentage-based fees are also disqualified.
You must make formal declarations about your qualifications and independence. This includes confirming you understand the appraisal will be used for tax purposes, acknowledging potential penalties for substantial valuation misstatements, and certifying your fee arrangement isn't based on the appraised value.
Proper Form 8283 completion requires attention to detail and understanding of IRS documentation rules. You need separate forms for each charity receiving donations, even when donating similar items to multiple organizations.
Section B requires signatures from both the qualified appraiser and the receiving charity. The charity must complete the Donee Acknowledgment section, confirming they received the property and understand any restrictions on its use. This creates a paper trail the IRS can verify during audits.
Keep detailed records beyond the basic form requirements. Maintain copies of the qualified appraisal, photographs for art objects, and any agreements about property use or restrictions. For conservation easements on historic buildings, additional documentation including exterior photographs and development restriction descriptions are mandatory.
Pro Tip: Always prepare separate Form 8283 Section B documents for each charity, even when donating identical items, because each organization must sign their own Donee Acknowledgment section.
The consequences of incomplete documentation are severe. Missing required appraisals, signatures, or attachments can result in complete disallowance of your charitable deduction. The IRS rarely accepts "reasonable cause" explanations for missing qualified appraisals on high-value donations. To avoid these pitfalls, be aware of the common mistakes when filling out IRS Form 8283 that can jeopardize your deduction.
Understanding why an appraisal is necessary for charitable donations protects both your charitable deduction and professional reputation. By following qualified appraisal standards, meeting appraiser qualification criteria, and completing proper documentation, you ensure compliance with federal tax regulations while helping donors maximize their legitimate charitable benefits. Working with professional appraisers who specialize in donated goods can simplify the process and ensure accuracy.
For those looking to maximize their tax benefits, understanding how appraisals can maximize your tax deductions for donated items is essential. Additionally, learning about personal property appraisals for charitable donations can help you achieve accurate valuations that stand up to IRS scrutiny.
A qualified appraisal is required for noncash charitable contributions over $5,000 per item or group of similar items (requiring Section B), art donations over $20,000 (which must include the complete appraisal attached), clothing or household items not in good condition over $500, and any deductions over $500,000. Each charity receiving donations requires a separate Form 8283.
The qualified appraisal must be completed no earlier than 60 days before the donation date and no later than the tax return due date (including extensions). The valuation effective date must align with the contribution date or fall within 60 days prior to the donation. If you plan to donate more than 60 days after the appraisal, you'll need a new appraisal.
A qualified appraiser must have relevant education and at least two years of experience (or a recognized professional designation), regularly prepare paid appraisals, and be independent from the transaction. They cannot be the donor, the receiving charity, related parties, or anyone receiving percentage-based fees. The appraiser must include their qualifications declaration and taxpayer identification number.
A qualified appraisal must include 12 essential elements: detailed property description and condition, valuation effective date, appraisal completion date, terms of any agreements, appraiser credentials and taxpayer ID, signature and declaration, valuation method used, basis for valuation, fair market value conclusion, qualification statement, declaration for tax purposes, and USPAP compliance statement.
