When donating to charity, many people are curious about the potential tax benefits that are involved in the process. According to the IRS, “if you donate property other than cash to a qualified organization, you may deduct the fair market value of the property.” In this same vein, the IRS also requires that a donor who claims a charitable deduction of $5,000 or more for non-cash donations of personal or real property must obtain a qualified appraisal of the items' combined value.
An appraisal must be "qualified" to satisfy the IRS. A qualified appraisal is one that:
The appraisal must be arranged for and paid for by the donor—the nonprofit cannot help pay for it in any way. Moreover, the donor can't deduct appraisal fees as part of the charitable contribution.
Yes, if you wish to claim a deduction over $5,000. According to the IRS “A taxpayer may not claim a charitable deduction for a noncash contribution of over $5,000 unless the taxpayer obtains a qualified written appraisal of the donated property. Additionally, the taxpayer generally must attach an appraisal summary made in Section B of Form 8283, not the appraisal itself, to the income tax return on which the deduction is first claimed or reported. The appraisal summary must be signed and dated by the donee and the qualified appraiser who prepared it.”
Without an appraisal report and appraisal summary from a qualified appraisal, a charitable donation deduction will not be accepted. In other words, proper documentation is necessary, even if the listed value (without an appraisal) is correct.
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