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2011 1040ez Instructions

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2011 1040ez Instructions

2011 1040ez instructions Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. 2011 1040ez instructions Stock. 2011 1040ez instructions Options. 2011 1040ez instructions Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). 2011 1040ez instructions What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. 2011 1040ez instructions Fair market value. 2011 1040ez instructions   Fair market value (FMV) is the price that property would sell for on the open market. 2011 1040ez instructions It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. 2011 1040ez instructions If you put a restriction on the use of property you donate, the FMV must reflect that restriction. 2011 1040ez instructions Example 1. 2011 1040ez instructions If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. 2011 1040ez instructions Usually, such items are worth far less than what you paid for them. 2011 1040ez instructions Example 2. 2011 1040ez instructions If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. 2011 1040ez instructions Factors. 2011 1040ez instructions   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. 2011 1040ez instructions These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. 2011 1040ez instructions   These factors are discussed later. 2011 1040ez instructions Also, see Table 1 for a summary of questions to ask as you consider each factor. 2011 1040ez instructions Date of contribution. 2011 1040ez instructions   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. 2011 1040ez instructions Stock. 2011 1040ez instructions   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. 2011 1040ez instructions If the certificate is mailed and received through the regular mail, it is the date of mailing. 2011 1040ez instructions If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. 2011 1040ez instructions Options. 2011 1040ez instructions   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. 2011 1040ez instructions The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. 2011 1040ez instructions Example. 2011 1040ez instructions You grant an option to a local university, which is a qualified organization, to buy real property. 2011 1040ez instructions Under the option, the university could buy the property at any time during a 2-year period for $40,000. 2011 1040ez instructions The FMV of the property on the date the option is granted is $50,000. 2011 1040ez instructions In the following tax year, the university exercises the option. 2011 1040ez instructions The FMV of the property on the date the option is exercised is $55,000. 2011 1040ez instructions Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. 2011 1040ez instructions Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. 2011 1040ez instructions Usually it is not that simple. 2011 1040ez instructions Using such formulas, etc. 2011 1040ez instructions , seldom results in an acceptable determination of FMV. 2011 1040ez instructions There is no single formula that always applies when determining the value of property. 2011 1040ez instructions This is not to say that a valuation is only guesswork. 2011 1040ez instructions You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. 2011 1040ez instructions For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. 2011 1040ez instructions When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. 2011 1040ez instructions On the other hand, it may be an antique, the value of which could not be determined by using any formula. 2011 1040ez instructions Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. 2011 1040ez instructions However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. 2011 1040ez instructions The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. 2011 1040ez instructions Example. 2011 1040ez instructions Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. 2011 1040ez instructions The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. 2011 1040ez instructions The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. 2011 1040ez instructions Tom gave the gems to a qualified charity 13 months after buying them. 2011 1040ez instructions The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. 2011 1040ez instructions The best evidence of FMV depends on actual transactions and not on some artificial estimate. 2011 1040ez instructions The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. 2011 1040ez instructions Terms of the purchase or sale. 2011 1040ez instructions   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. 2011 1040ez instructions These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. 2011 1040ez instructions Rate of increase or decrease in value. 2011 1040ez instructions   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. 2011 1040ez instructions For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. 2011 1040ez instructions Example. 2011 1040ez instructions Bill Brown bought a painting for $10,000. 2011 1040ez instructions Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. 2011 1040ez instructions The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. 2011 1040ez instructions Arm's-length offer. 2011 1040ez instructions   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. 2011 1040ez instructions To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. 2011 1040ez instructions Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. 2011 1040ez instructions Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. 2011 1040ez instructions The weight to be given to each sale depends on the following. 2011 1040ez instructions The degree of similarity between the property sold and the donated property. 2011 1040ez instructions The time of the sale—whether it was close to the valuation date. 2011 1040ez instructions The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. 2011 1040ez instructions The conditions of the market in which the sale was made—whether unusually inflated or deflated. 2011 1040ez instructions The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. 2011 1040ez instructions Example 1. 2011 1040ez instructions Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. 2011 1040ez instructions The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. 2011 1040ez instructions The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. 2011 1040ez instructions Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. 2011 1040ez instructions At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. 2011 1040ez instructions The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. 2011 1040ez instructions Example 2. 2011 1040ez instructions The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. 2011 1040ez instructions The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. 2011 1040ez instructions The principal and interest on the note would not be due for 12 years. 2011 1040ez instructions According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. 2011 1040ez instructions She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. 2011 1040ez instructions At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. 2011 1040ez instructions The difference between the two prices was solely at the discretion of the buyer. 2011 1040ez instructions The promoter was a willing seller for $10,000. 2011 1040ez instructions Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. 2011 1040ez instructions Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. 2011 1040ez instructions However, there must be a reasonable relationship between the replacement cost and the FMV. 2011 1040ez instructions The replacement cost is the amount it would cost to replace the donated item on the valuation date. 2011 1040ez instructions Often there is no relationship between the replacement cost and the FMV. 2011 1040ez instructions If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. 2011 1040ez instructions To determine the replacement cost of the donated property, find the “estimated replacement cost new. 2011 1040ez instructions ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. 2011 1040ez instructions You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. 2011 1040ez instructions ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. 2011 1040ez instructions For an expert's opinion to deserve much weight, the facts must support the opinion. 2011 1040ez instructions For additional information, see Appraisals, later. 2011 1040ez instructions Table 1. 2011 1040ez instructions Factors That Affect FMV IF the factor you are considering is. 2011 1040ez instructions . 2011 1040ez instructions . 2011 1040ez instructions THEN you should ask these questions. 2011 1040ez instructions . 2011 1040ez instructions . 2011 1040ez instructions     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. 2011 1040ez instructions Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. 2011 1040ez instructions When you rely on sales of comparable property, the sales must have been made in an open market. 2011 1040ez instructions If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. 2011 1040ez instructions For example, liquidation sale prices usually do not indicate the FMV. 2011 1040ez instructions Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. 2011 1040ez instructions Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. 2011 1040ez instructions However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. 2011 1040ez instructions The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. 2011 1040ez instructions Example. 2011 1040ez instructions You give a rare, old book to your former college. 2011 1040ez instructions The book is a third edition and is in poor condition because of a missing back cover. 2011 1040ez instructions You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. 2011 1040ez instructions Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. 2011 1040ez instructions Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. 2011 1040ez instructions Future Events You may not consider unexpected events happening after your donation of property in making the valuation. 2011 1040ez instructions You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. 2011 1040ez instructions Example. 2011 1040ez instructions You give farmland to a qualified charity. 2011 1040ez instructions The transfer provides that your mother will have the right to all income and full use of the property for her life. 2011 1040ez instructions Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. 2011 1040ez instructions You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. 2011 1040ez instructions Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. 2011 1040ez instructions Example. 2011 1040ez instructions You give all your rights in a successful patent to your favorite charity. 2011 1040ez instructions Your records show that before the valuation date there were three stages in the patent's history of earnings. 2011 1040ez instructions First, there was rapid growth in earnings when the invention was introduced. 2011 1040ez instructions Then, there was a period of high earnings when the invention was being exploited. 2011 1040ez instructions Finally, there was a decline in earnings when competing inventions were introduced. 2011 1040ez instructions The entire history of earnings may be relevant in estimating the future earnings. 2011 1040ez instructions However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. 2011 1040ez instructions The market conditions at those times do not represent the condition of the market at the valuation date. 2011 1040ez instructions What is most significant is the trend of decline in earnings up to the valuation date. 2011 1040ez instructions For more information about donations of patents, see Patents, later. 2011 1040ez instructions Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. 2011 1040ez instructions For information on appraisals, see Appraisals, later. 2011 1040ez instructions Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. 2011 1040ez instructions Such used property may have little or no market value because of its worn condition. 2011 1040ez instructions It may be out of style or no longer useful. 2011 1040ez instructions You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. 2011 1040ez instructions A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. 2011 1040ez instructions See Deduction over $500 for certain clothing or household items, later. 2011 1040ez instructions If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. 2011 1040ez instructions Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. 2011 1040ez instructions Valuation of items of clothing does not lend itself to fixed formulas or methods. 2011 1040ez instructions The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. 2011 1040ez instructions You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. 2011 1040ez instructions An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. 2011 1040ez instructions See Deduction over $500 for certain clothing or household items, later. 2011 1040ez instructions For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. 2011 1040ez instructions Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. 2011 1040ez instructions The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. 2011 1040ez instructions If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. 2011 1040ez instructions The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. 2011 1040ez instructions Sentimental personal value has no effect on FMV. 2011 1040ez instructions But if the jewelry was owned by a famous person, its value might increase. 2011 1040ez instructions Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. 2011 1040ez instructions Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. 2011 1040ez instructions Art valued at $20,000 or more. 2011 1040ez instructions   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. 2011 1040ez instructions For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. 2011 1040ez instructions Art valued at $50,000 or more. 2011 1040ez instructions   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. 2011 1040ez instructions You must request the statement before filing the tax return that reports the donation. 2011 1040ez instructions Your request must include the following. 2011 1040ez instructions A copy of a qualified appraisal of the item. 2011 1040ez instructions See Qualified Appraisal, later. 2011 1040ez instructions A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. 2011 1040ez instructions Add $250 for each item in excess of three. 2011 1040ez instructions A completed Form 8283, Section B. 2011 1040ez instructions The location of the IRS territory that has examination responsibility for your return. 2011 1040ez instructions If your request lacks essential information, you will be notified and given 30 days to provide the missing information. 2011 1040ez instructions   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. 2011 1040ez instructions O. 2011 1040ez instructions Box 27720 McPherson Station Washington, DC 20038 Refunds. 2011 1040ez instructions   You can withdraw your request for a Statement of Value at any time before it is issued. 2011 1040ez instructions However, the IRS will not refund the user fee if you do. 2011 1040ez instructions   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. 2011 1040ez instructions Authenticity. 2011 1040ez instructions   The authenticity of the donated art must be determined by the appraiser. 2011 1040ez instructions Physical condition. 2011 1040ez instructions   Important items in the valuation of antiques and art are physical condition and extent of restoration. 2011 1040ez instructions These have a significant effect on the value and must be fully reported in an appraisal. 2011 1040ez instructions An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. 2011 1040ez instructions Art appraisers. 2011 1040ez instructions   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. 2011 1040ez instructions Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. 2011 1040ez instructions Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. 2011 1040ez instructions They can report more recent comparable sales to support their opinion. 2011 1040ez instructions   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. 2011 1040ez instructions It lists museums both by state and by category. 2011 1040ez instructions   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. 2011 1040ez instructions The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. 2011 1040ez instructions You may be able to find a qualified appraiser on the Internet. 2011 1040ez instructions You may also contact associations of dealers for guidance. 2011 1040ez instructions Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. 2011 1040ez instructions Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. 2011 1040ez instructions Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. 2011 1040ez instructions Reference material. 2011 1040ez instructions   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. 2011 1040ez instructions When using one of these price guides, you must use the current edition at the date of contribution. 2011 1040ez instructions However, these sources are not always reliable indicators of FMV and should be supported by other evidence. 2011 1040ez instructions   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. 2011 1040ez instructions The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. 2011 1040ez instructions The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. 2011 1040ez instructions If you are donating a valuable collection, you should get an appraisal. 2011 1040ez instructions If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. 2011 1040ez instructions Stamp collections. 2011 1040ez instructions   Most libraries have catalogs or other books that report the publisher's estimate of values. 2011 1040ez instructions Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. 2011 1040ez instructions Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. 2011 1040ez instructions Coin collections. 2011 1040ez instructions   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. 2011 1040ez instructions Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. 2011 1040ez instructions Another important factor is the coin's condition. 2011 1040ez instructions For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. 2011 1040ez instructions   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. 2011 1040ez instructions Books. 2011 1040ez instructions   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. 2011 1040ez instructions This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. 2011 1040ez instructions Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. 2011 1040ez instructions Modest value of collection. 2011 1040ez instructions   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. 2011 1040ez instructions   A book that is very old, or very rare, is not necessarily valuable. 2011 1040ez instructions There are many books that are very old or rare, but that have little or no market value. 2011 1040ez instructions Condition of book. 2011 1040ez instructions   The condition of a book may have a great influence on its value. 2011 1040ez instructions Collectors are interested in items that are in fine, or at least good, condition. 2011 1040ez instructions When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. 2011 1040ez instructions Other factors. 2011 1040ez instructions   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). 2011 1040ez instructions Collectors usually want first editions of books. 2011 1040ez instructions However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. 2011 1040ez instructions Manuscripts, autographs, diaries, and similar items. 2011 1040ez instructions   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. 2011 1040ez instructions The writings of unknowns also may be of value if they are of unusual historical or literary importance. 2011 1040ez instructions Determining the value of such material is difficult. 2011 1040ez instructions For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. 2011 1040ez instructions The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. 2011 1040ez instructions Signatures. 2011 1040ez instructions   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. 2011 1040ez instructions But complete sets of the signatures of U. 2011 1040ez instructions S. 2011 1040ez instructions presidents are in demand. 2011 1040ez instructions Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. 2011 1040ez instructions Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. 2011 1040ez instructions Prices are reported for each make, model, and year. 2011 1040ez instructions These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. 2011 1040ez instructions The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. 2011 1040ez instructions But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. 2011 1040ez instructions These publications are sometimes available from public libraries or at a bank, credit union, or finance company. 2011 1040ez instructions You can also find pricing information about used cars on the Internet. 2011 1040ez instructions An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. 2011 1040ez instructions However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. 2011 1040ez instructions The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. 2011 1040ez instructions Example. 2011 1040ez instructions You donate a used car in poor condition to a local high school for use by students studying car repair. 2011 1040ez instructions A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. 2011 1040ez instructions However, the guide shows the price for a private party sale of the car is only $750. 2011 1040ez instructions The FMV of the car is considered to be no more than $750. 2011 1040ez instructions Boats. 2011 1040ez instructions   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. 2011 1040ez instructions More information. 2011 1040ez instructions   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. 2011 1040ez instructions This rule applies if the claimed value of the donated vehicle is more than $500. 2011 1040ez instructions In certain cases, you can deduct the vehicle's FMV. 2011 1040ez instructions For details, see Publication 526. 2011 1040ez instructions Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. 2011 1040ez instructions For more information, see Publication 526. 2011 1040ez instructions Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. 2011 1040ez instructions However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. 2011 1040ez instructions Generally, this means your deduction is the lesser of the property's FMV or its basis. 2011 1040ez instructions For details, see Publication 526. 2011 1040ez instructions Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. 2011 1040ez instructions See Date of contribution, earlier, under What Is Fair Market Value (FMV). 2011 1040ez instructions Selling prices on valuation date. 2011 1040ez instructions   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. 2011 1040ez instructions For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. 2011 1040ez instructions You get the average price by adding $11 and $9 and dividing the sum by 2. 2011 1040ez instructions No sales on valuation date. 2011 1040ez instructions   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. 2011 1040ez instructions Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. 2011 1040ez instructions Example. 2011 1040ez instructions   On the day you gave stock to a qualified organization, there were no sales of the stock. 2011 1040ez instructions Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. 2011 1040ez instructions The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. 2011 1040ez instructions   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. 2011 1040ez instructions This applies if these prices are published in a generally available listing or publication of general circulation. 2011 1040ez instructions If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. 2011 1040ez instructions See also Unavailable prices or closely held corporation, later. 2011 1040ez instructions Bid and asked prices on valuation date. 2011 1040ez instructions   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. 2011 1040ez instructions Example. 2011 1040ez instructions Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. 2011 1040ez instructions The FMV is $15, the average price between the bid and asked prices. 2011 1040ez instructions No prices on valuation date. 2011 1040ez instructions   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. 2011 1040ez instructions Both dates must be within a reasonable period. 2011 1040ez instructions Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. 2011 1040ez instructions Example. 2011 1040ez instructions On the day you gave stock to a qualified organization, no prices were available. 2011 1040ez instructions Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. 2011 1040ez instructions The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. 2011 1040ez instructions   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. 2011 1040ez instructions Large blocks of stock. 2011 1040ez instructions   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. 2011 1040ez instructions On the other hand, market forces may exist that will afford higher prices for large blocks of stock. 2011 1040ez instructions Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. 2011 1040ez instructions Unavailable prices or closely held corporation. 2011 1040ez instructions   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. 2011 1040ez instructions For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. 2011 1040ez instructions For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. 2011 1040ez instructions Other factors. 2011 1040ez instructions   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. 2011 1040ez instructions For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. 2011 1040ez instructions   You should keep complete financial and other information on which the valuation is based. 2011 1040ez instructions This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. 2011 1040ez instructions Restricted securities. 2011 1040ez instructions   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. 2011 1040ez instructions These restricted securities usually trade at a discount in relation to freely traded securities. 2011 1040ez instructions   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. 2011 1040ez instructions Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. 2011 1040ez instructions The appraiser must be thoroughly trained in the application of appraisal principles and theory. 2011 1040ez instructions In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. 2011 1040ez instructions The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. 2011 1040ez instructions The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. 2011 1040ez instructions In general, there are three main approaches to the valuation of real estate. 2011 1040ez instructions An appraisal may require the combined use of two or three methods rather than one method only. 2011 1040ez instructions 1. 2011 1040ez instructions Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. 2011 1040ez instructions The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. 2011 1040ez instructions If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. 2011 1040ez instructions , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. 2011 1040ez instructions For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. 2011 1040ez instructions The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. 2011 1040ez instructions Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. 2011 1040ez instructions Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. 2011 1040ez instructions 2. 2011 1040ez instructions Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. 2011 1040ez instructions The key elements are the determination of the income to be capitalized and the rate of capitalization. 2011 1040ez instructions 3. 2011 1040ez instructions Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. 2011 1040ez instructions Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. 2011 1040ez instructions Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. 2011 1040ez instructions Generally, this method serves to support the value determined from other methods. 2011 1040ez instructions When the replacement cost method is applied to improved realty, the land and improvements are valued separately. 2011 1040ez instructions The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. 2011 1040ez instructions This cost represents the total cost of labor and material, overhead, and profit. 2011 1040ez instructions After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. 2011 1040ez instructions Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. 2011 1040ez instructions The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. 2011 1040ez instructions The value of the goodwill of the business should also be taken into consideration. 2011 1040ez instructions You should keep complete financial and other information on which you base the valuation. 2011 1040ez instructions This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. 2011 1040ez instructions Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. 2011 1040ez instructions The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. 2011 1040ez instructions To determine present value, you must know the applicable interest rate and use actuarial tables. 2011 1040ez instructions Interest rate. 2011 1040ez instructions   The applicable interest rate varies. 2011 1040ez instructions It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. 2011 1040ez instructions The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. 2011 1040ez instructions You can call the IRS office at 1-800-829-1040 to obtain this rate. 2011 1040ez instructions Actuarial tables. 2011 1040ez instructions   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. 2011 1040ez instructions   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). 2011 1040ez instructions Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. 2011 1040ez instructions For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. 2011 1040ez instructions   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. 2011 1040ez instructions Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. 2011 1040ez instructions You can download Publications 1457 and 1458 from www. 2011 1040ez instructions irs. 2011 1040ez instructions gov. 2011 1040ez instructions In addition, they are available for purchase via the website of the U. 2011 1040ez instructions S. 2011 1040ez instructions Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. 2011 1040ez instructions O. 2011 1040ez instructions Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. 2011 1040ez instructions 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. 2011 1040ez instructions 664-4(e), and other transfers in Regulation 20. 2011 1040ez instructions 2031-7(d)(6). 2011 1040ez instructions Special factors. 2011 1040ez instructions   If you need a special factor for an actual transaction, you can request a letter ruling. 2011 1040ez instructions Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. 2011 1040ez instructions Also include copies of the relevant instruments. 2011 1040ez instructions IRS charges a user fee for providing special factors. 2011 1040ez instructions   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. 2011 1040ez instructions R. 2011 1040ez instructions B. 2011 1040ez instructions 1. 2011 1040ez instructions Revenue Procedure 2006-1 is available at www. 2011 1040ez instructions irs. 2011 1040ez instructions gov/irb/2006-01_IRB/ar06. 2011 1040ez instructions html. 2011 1040ez instructions   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. 2011 1040ez instructions Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. 2011 1040ez instructions But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. 2011 1040ez instructions If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. 2011 1040ez instructions Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. 2011 1040ez instructions However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. 2011 1040ez instructions Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. 2011 1040ez instructions To determine this value, you must know the FMV of the property on the date of the contribution. 2011 1040ez instructions Multiply this value by the appropriate factor. 2011 1040ez instructions Publications 1457 and 1458 contain these factors. 2011 1040ez instructions You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). 2011 1040ez instructions You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. 2011 1040ez instructions See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. 2011 1040ez instructions You can download Publication 1459 from www. 2011 1040ez instructions irs. 2011 1040ez instructions gov. 2011 1040ez instructions For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. 2011 1040ez instructions If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. 2011 1040ez instructions This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. 2011 1040ez instructions Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. 2011 1040ez instructions For more information, see section 1. 2011 1040ez instructions 170A-12 of the Income Tax Regulations. 2011 1040ez instructions Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. 2011 1040ez instructions It must extend over the entire term of your interest in the property. 2011 1040ez instructions For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. 2011 1040ez instructions You can claim a deduction for the contribution if you do not have any other interest in the property. 2011 1040ez instructions To figure the value of a contribution involving a partial interest, see Publication 1457. 2011 1040ez instructions If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. 2011 1040ez instructions Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. 2011 1040ez instructions Qualified organization. 2011 1040ez instructions   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. 2011 1040ez instructions , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. 2011 1040ez instructions The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. 2011 1040ez instructions Conservation purposes. 2011 1040ez instructions   Your contribution must be made only for one of the following conservation purposes. 2011 1040ez instructions Preserving land areas for outdoor recreation by, or for the education of, the general public. 2011 1040ez instructions Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. 2011 1040ez instructions Preserving open space, including farmland and forest land, if it yields a significant public benefit. 2011 1040ez instructions It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. 2011 1040ez instructions Preserving a historically important land area or a certified historic structure. 2011 1040ez instructions There must be some visual public access to the property. 2011 1040ez instructions Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. 2011 1040ez instructions Building in registered historic district. 2011 1040ez instructions   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. 2011 1040ez instructions The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. 2011 1040ez instructions You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. 2011 1040ez instructions If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. 2011 1040ez instructions   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. 2011 1040ez instructions See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. 2011 1040ez instructions Qualified real property interest. 2011 1040ez instructions   This is any of the following interests in real property. 2011 1040ez instructions Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). 2011 1040ez instructions A remainder interest. 2011 1040ez instructions A restriction (granted in perpetuity) on the use that may be made of the real property. 2011 1040ez instructions Valuation. 2011 1040ez instructions   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. 2011 1040ez instructions If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. 2011 1040ez instructions If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. 2011 1040ez instructions   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. 2011 1040ez instructions If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. 2011 1040ez instructions   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. 2011 1040ez instructions If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. 2011 1040ez instructions   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. 2011 1040ez instructions You should also consider any zoning, conservation, or historical preservation laws that would restrict development. 2011 1040ez instructions Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. 2011 1040ez instructions Example. 2011 1040ez instructions   You own 10 acres of farmland. 2011 1040ez instructions Similar land in the area has an FMV of $2,000 an acre. 2011 1040ez instructions However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. 2011 1040ez instructions Your county wants to preserve open space and prevent further development in your area. 2011 1040ez instructions   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. 2011 1040ez instructions The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. 2011 1040ez instructions More information. 2011 1040ez instructions   For more information about qualified conservation contributions, see Publication 526. 2011 1040ez instructions Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. 2011 1040ez instructions (There is one exception, described next, for certain clothing and household items. 2011 1040ez instructions ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. 2011 1040ez instructions There are exceptions. 2011 1040ez instructions See Deductions of More Than $5,000, later. 2011 1040ez instructions The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. 2011 1040ez instructions An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. 2011 1040ez instructions The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. 2011 1040ez instructions The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. 2011 1040ez instructions The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. 2011 1040ez instructions All facts associated with the donation must be considered. 2011 1040ez instructions Deduction over $500 for certain clothing or household items. 2011 1040ez instructions   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. 2011 1040ez instructions See Household Goods and Used Clothing, earlier. 2011 1040ez instructions Cost of appraisals. 2011 1040ez instructions   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. 2011 1040ez instructions However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. 2011 1040ez instructions Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. 2011 1040ez instructions There are exceptions, discussed later. 2011 1040ez instructions You should keep the appraiser's report with your written records. 2011 1040ez instructions Records are discussed in Publication 526. 2011 1040ez instructions The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. 2011 1040ez instructions For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. 2011 1040ez instructions You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. 2011 1040ez instructions Exceptions. 2011 1040ez instructions   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. 2011 1040ez instructions   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. 2011 1040ez instructions Publicly traded securities. 2011 1040ez instructions   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. 2011 1040ez instructions Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. 2011 1040ez instructions   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. 2011 1040ez instructions   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. 2011 1040ez instructions A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. 2011 1040ez instructions   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. 2011 1040ez instructions Bid and asked quotations are not taken into account. 2011 1040ez instructions   The computation period is weekly during October through December and monthly during January through September. 2011 1040ez instructions The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. 2011 1040ez instructions Nonpublicly traded stock. 2011 1040ez instructions   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. 2011 1040ez instructions However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. 2011 1040ez instructions Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. 2011 1040ez instructions This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. 2011 1040ez instructions If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. 2011 1040ez instructions Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. 2011 1040ez instructions You must also complete Form 8283, Section B, and attach it to your tax return. 2011 1040ez instructions See Deductions of More Than $5,000, earlier. 2011 1040ez instructions A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. 2011 1040ez instructions 170A-13(c)(3) and Notice 2006-96, 2006-46 I. 2011 1040ez instructions R. 2011 1040ez instructions B. 2011 1040ez instructions 902 (available at www. 2011 1040ez instructions irs. 2011 1040ez instructions gov/irb/2006-46_IRB/ar13. 2011 1040ez instructions html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). 2011 1040ez instructions You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. 2011 1040ez instructions If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. 2011 1040ez instructions Form 8283, Section B, must be attached to your tax return. 2011 1040ez instructions Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. 2011 1040ez instructions There are four exceptions. 2011 1040ez instructions If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. 2011 1040ez instructions See Paintings, Antiques, and Other Objects of Art, earlier. 2011 1040ez instructions If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. 2011 1040ez instructions See Deductions of More Than $500,000, earlier. 2011 1040ez instructions If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. 2011 1040ez instructions See Deduction over $500 for certain clothing or household items, earlier. 2011 1040ez instructions If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. 2011 1040ez instructions See Building in registered historic district, earlier. 2011 1040ez instructions Prohibited appraisal fee. 2011 1040ez instructions   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. 2011 1040ez instructions If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. 2011 1040ez instructions However, appraisals are not disqualified when an otherwise prohi
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The 2011 1040ez Instructions

2011 1040ez instructions 29. 2011 1040ez instructions   Límite sobre Deducciones Detalladas Table of Contents Introduction Useful Items - You may want to see: ¿Está Usted Sujeto al Límite? ¿Qué Deducciones Detalladas Están Limitadas? ¿Qué Deducciones Detalladas no Están Limitadas? ¿Cómo se Calcula el Límite?Ejemplo Introduction Este capítulo trata del límite general sobre las deducciones detalladas en el Anexo A (Formulario 1040). 2011 1040ez instructions Los temas abarcan: Quién está sujeto al límite. 2011 1040ez instructions Qué deducciones detalladas están limitadas. 2011 1040ez instructions Cómo calcular el límite. 2011 1040ez instructions Useful Items - You may want to see: Formulario (e Instrucciones) Anexo A (Formulario 1040) Itemized Deductions (Deducciones detalladas), en inglés. 2011 1040ez instructions ¿Está Usted Sujeto al Límite? Si tiene ingresos brutos ajustados (AGI, por sus siglas en inglés) de más de $300,000, si es casado que presenta la declaración conjunta o viudo calificado, $275,000, si es cabeza de familia, $250,000, si es soltero o $150,000, si es casado que presenta la declaración por separado, está sujeto al límite sobre determinadas deducciones detalladas. 2011 1040ez instructions El ingreso bruto ajustado (AGI) es la cantidad de la línea 38 (Formulario 1040). 2011 1040ez instructions ¿Qué Deducciones Detalladas Están Limitadas? Las siguientes deducciones del Anexo A (Formulario 1040) están sujetas al límite general sobre las deducciones detalladas: Impuestos pagados —línea 9. 2011 1040ez instructions Intereses pagados —líneas 10,11,12 y 13. 2011 1040ez instructions Donaciones a organizaciones caritativas —línea 19. 2011 1040ez instructions Gastos laborales y determinadas deducciones misceláneas —línea 27. 2011 1040ez instructions Otras deducciones misceláneas —línea 28, excluyendo pérdidas por apuestas y juegos de azar y por hecho fortuito o robo. 2011 1040ez instructions ¿Qué Deducciones Detalladas no Están Limitadas? Las siguientes deducciones del Anexo A (Formulario 1040) no están sujetas al límite general sobre las deducciones detalladas. 2011 1040ez instructions Sin embargo, igualmente están sujetas a otros límites aplicables. 2011 1040ez instructions Gastos médicos y dentales —línea 4. 2011 1040ez instructions Gastos de intereses de inversión —línea 14. 2011 1040ez instructions Pérdidas por hecho fortuito y robo de bienes de uso personal —línea 20. 2011 1040ez instructions Pérdidas por hecho fortuito y robo de bienes que generan ingresos —línea 28. 2011 1040ez instructions Pérdidas por apuestas y juegos de azar —línea 28. 2011 1040ez instructions ¿Cómo se Calcula el Límite? Si las deducciones detalladas están sujetas al límite, el total de todas sus deducciones detalladas es reducido por la cantidad menor de uno de: el 80% de las deducciones detalladas afectadas por el límite. 2011 1040ez instructions Vea ¿Qué Deducciones Detalladas Están Limitadas? , anteriormente o el 3% de la cantidad por la cual los ingresos brutos ajustados sobrepasen $300,000, si es casado que presenta la declaración conjunta o viudo calificado, $275,000, si es cabeza de familia, $250,000, si es soltero o $150,000, si es casado que presenta la declaración por separado. 2011 1040ez instructions Antes de calcular el límite general sobre las deducciones detalladas, primero tiene que llenar las líneas 1 a 28 del Anexo A (Formulario 1040), incluyendo todo formulario afín (tal como el Formulario 2106, el Formulario 4684, etc. 2011 1040ez instructions ) El límite general sobre las deducciones detalladas se calcula después de haberse aplicado cualquier otro límite sobre la asignación de alguna deducción detallada. 2011 1040ez instructions Estos límites adicionales abarcan los límites sobre donaciones caritativas (capítulo 24), el límite sobre determinados gastos de comida y entretenimiento (capítulo 26) y el límite del 2% de los ingresos brutos ajustados sobre determinadas deducciones misceláneas (capítulo 28). 2011 1040ez instructions Hoja de trabajo de deducciones detalladas. 2011 1040ez instructions   Después de completar hasta la línea 28, inclusive, del Anexo A (Formulario 1040), puede utilizar la Itemized Deductions Worksheet (Hoja de trabajo de las deducciones detalladas), en las Instrucciones del Anexo A (Formulario 1040) para calcular el límite. 2011 1040ez instructions Anote el resultado en la línea 29 del Anexo A (Formulario 1040). 2011 1040ez instructions Guarde la hoja de trabajo con su documentación. 2011 1040ez instructions Debe comparar la cantidad de la deducción estándar con la cantidad de las deducciones detalladas después de aplicar el límite. 2011 1040ez instructions Utilice la cantidad mayor cuando complete la línea 40 (Formulario 1040). 2011 1040ez instructions Vea el capítulo 20 para información sobre cómo calcular la deducción estándar. 2011 1040ez instructions Ejemplo Para el año tributario 2013, Guillermo y Teresa Valdez presentan la declaración conjunta en el Formulario 1040. 2011 1040ez instructions Tienen ingresos brutos ajustados de $325,500 en la línea 38. 2011 1040ez instructions Las deducciones detalladas de su Anexo A son las siguientes: Impuestos pagados —línea 9   $ 17,900 Intereses pagados —líneas 10,11,12 y 13   45,000 Gasto de intereses de inversión  —línea 14   41,000 Donaciones a organizaciones caritativas —línea 19   21,000 Gastos laborales —línea 27   17,240 Total   $142,140       La deducción por gastos de intereses de inversión de los Valdez ($41,000 de la línea 14 del Anexo A (Formulario 1040) no está sujeta al límite general de las deducciones detalladas. 2011 1040ez instructions Los Valdez utilizan la Itemized Deductions Worksheet (Hoja de trabajo de las deducciones detalladas), en las Instrucciones del Anexo A (Formulario 1040) para calcular el límite general. 2011 1040ez instructions Del total de las deducciones detalladas de $142,140, los Valdez pueden deducir sólo $141,375 ($142,140 - $765). 2011 1040ez instructions Anotan $141,375 en la línea 29 del Anexo A (Formulario 1040). 2011 1040ez instructions Prev  Up  Next   Home   More Online Publications