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File state for free Publication 531 - Introductory Material Table of Contents Future Developments What's New Reminder IntroductionOrdering forms and publications. File state for free Tax questions. File state for free Future Developments For the latest information about developments related to Publication 531, such as legislation enacted after this publication was published, go to www. File state for free irs. File state for free gov/pub531. File state for free What's New Additional Medicare Tax. File state for free  Beginning in 2013, a 0. File state for free 9% Additional Medicare Tax applies to Medicare wages, Railroad Retirement Tax Act (RRTA) compensation, and self-employment income that are more than: $125,000 if married filing separately, $250,000 if married filing jointly, or $200,000 for any other filing status. File state for free An employer is required to withhold Additional Medicare Tax on any Medicare wages or RRTA compensation it pays to an employee in excess of $200,000 in a calendar year without regard to the employee's filing status. File state for free An employer is required to begin withholding Additional Medicare Tax in the pay period in which it pays wages or compensation in excess of $200,000 to an employee and continue to withhold it until the end of the calendar year. File state for free Additional Medicare Tax is only imposed on the employee. File state for free There is no employer share of Additional Medicare Tax. File state for free All wages and compensation that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. File state for free Tips are subject to Additional Medicare Tax withholding, if, in combination with other wages paid by the employer, they exceed the $200,000 withholding threshold. File state for free Similarly, tips are subject to Additional Medicare Tax withholding, if, in combination with other RRTA compensation paid by the employer, they exceed the $200,000 withholding threshold. File state for free For more information on Additional Medicare Tax, go to www. File state for free irs. File state for free gov and enter “Additional Medicare Tax” in the search box. File state for free Reminder Photographs of missing children. File state for free  The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. File state for free Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. File state for free You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child. File state for free Introduction This publication is for employees who receive tips. File state for free All tips you receive are income and are subject to federal income tax. File state for free You must include in gross income all tips you receive directly, charged tips paid to you by your employer, and your share of any tips you receive under a tip-splitting or tip-pooling arrangement. File state for free The value of noncash tips, such as tickets, passes, or other items of value, is also income and subject to tax. File state for free Reporting your tip income correctly is not difficult. File state for free You must do three things. File state for free Keep a daily tip record. File state for free Report tips to your employer. File state for free Report all your tips on your income tax return. File state for free  This publication will explain these three things and show you what to do on your tax return if you have not done the first two. File state for free This publication will also show you how to treat allocated tips. File state for free Comments and suggestions. File state for free   We welcome your comments about this publication and your suggestions for future editions. File state for free   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. File state for free NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. File state for free Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. File state for free   You can send your comments from www. File state for free irs. File state for free gov/formspubs/. File state for free Click on “More Information” and then on “Comment on Tax Forms and Publications”. File state for free   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products. File state for free Ordering forms and publications. File state for free   Visit www. File state for free irs. File state for free gov/formspubs/ to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received. File state for free Internal Revenue Service 1201 N. File state for free Mitsubishi Motorway Bloomington, IL 61705-6613 Tax questions. File state for free   If you have a tax question, check the information available on IRS. File state for free gov or call 1-800-829-1040. File state for free We cannot answer tax questions sent to either of the above addresses. 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Topic 506 - Charitable Contributions

Charitable contributions are deductible only if you itemize deductions on Form 1040, Schedule A (PDF).

To be deductible, charitable contributions must be made to qualified organizations. Payments to individuals are never deductible. See Publication 526, Charitable Contributions. To determine if the organization that you have contributed to qualifies as a charitable organization for income tax deductions, review Exempt Organizations Select Check on the IRS.gov website.

If your contribution entitles you to merchandise, goods, or services, including admission to a charity ball, banquet, theatrical performance, or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.

For a contribution of cash, check, or other monetary gift (regardless of amount), you must maintain as a record of the contribution a bank record or a written communication from the qualified organization containing the name of the organization, the date of the contribution, and the amount of the contribution. In addition to deducting your cash contributions, you generally can deduct the fair market value of any other property you donate to qualified organizations. See Publication 561, Determining the Value of Donated Property. For any contribution of $250 or more (including contributions of cash or property), you must obtain and keep in your records a contemporaneous written acknowledgment from the qualified organization indicating the amount of the cash and a description of any property contributed. The acknowledgment must say whether the organization provided any goods or services in exchange for the gift and, if so, must provide a description and a good faith estimate of the value of those goods or services. One document from the qualified organization may satisfy both the written communication requirement for monetary gifts and the contemporaneous written acknowledgment requirement for all contributions of $250 or more.

You must fill out Form 8283 (PDF), and attach it to your return, if your deduction for a noncash contribution is more than $500. If you claim a deduction for a contribution of noncash property worth $5,000 or less, you must fill out Form 8283, Section A. If you claim a deduction for a contribution of noncash property worth more than $5,000, you will need a qualified appraisal of the noncash property and must fill out Form 8283, Section B. If you claim a deduction for a contribution of noncash property worth more than $500,000, you also will need to attach the qualified appraisal to your return.

Special rules apply to donations of certain types of property such as automobiles, inventory and investments that have appreciated in value. For more information, refer to Publication 526, Charitable Contributions. For information on determining the value of your noncash contributions, refer to Publication 561, Determining the Value of Donated Property.

Page Last Reviewed or Updated: December 12, 2013

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File state for free Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. File state for free Stock. File state for free Options. File state for free 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). File state for free 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. File state for free Fair market value. File state for free   Fair market value (FMV) is the price that property would sell for on the open market. File state for free 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. File state for free If you put a restriction on the use of property you donate, the FMV must reflect that restriction. File state for free Example 1. File state for free 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. File state for free Usually, such items are worth far less than what you paid for them. File state for free Example 2. File state for free 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. File state for free Factors. File state for free   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. File state for free These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. File state for free   These factors are discussed later. File state for free Also, see Table 1 for a summary of questions to ask as you consider each factor. File state for free Date of contribution. File state for free   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. File state for free Stock. File state for free   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. File state for free If the certificate is mailed and received through the regular mail, it is the date of mailing. File state for free 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. File state for free Options. File state for free   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. File state for free The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. File state for free Example. File state for free You grant an option to a local university, which is a qualified organization, to buy real property. File state for free Under the option, the university could buy the property at any time during a 2-year period for $40,000. File state for free The FMV of the property on the date the option is granted is $50,000. File state for free In the following tax year, the university exercises the option. File state for free The FMV of the property on the date the option is exercised is $55,000. File state for free 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. File state for free 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. File state for free Usually it is not that simple. File state for free Using such formulas, etc. File state for free , seldom results in an acceptable determination of FMV. File state for free There is no single formula that always applies when determining the value of property. File state for free This is not to say that a valuation is only guesswork. File state for free You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. File state for free For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. File state for free When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. File state for free On the other hand, it may be an antique, the value of which could not be determined by using any formula. File state for free 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. File state for free 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. File state for free 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. File state for free Example. File state for free Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. File state for free 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. File state for free 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. File state for free Tom gave the gems to a qualified charity 13 months after buying them. File state for free The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. File state for free The best evidence of FMV depends on actual transactions and not on some artificial estimate. File state for free The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. File state for free Terms of the purchase or sale. File state for free   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. File state for free These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. File state for free Rate of increase or decrease in value. File state for free   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. File state for free 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. File state for free Example. File state for free Bill Brown bought a painting for $10,000. File state for free Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. File state for free 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. File state for free Arm's-length offer. File state for free   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. File state for free To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. File state for free 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. File state for free Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. File state for free The weight to be given to each sale depends on the following. File state for free The degree of similarity between the property sold and the donated property. File state for free The time of the sale—whether it was close to the valuation date. File state for free The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. File state for free The conditions of the market in which the sale was made—whether unusually inflated or deflated. File state for free The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. File state for free Example 1. File state for free 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. File state for free 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. File state for free 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. File state for free Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. File state for free At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. File state for free 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. File state for free Example 2. File state for free The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. File state for free 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. File state for free The principal and interest on the note would not be due for 12 years. File state for free 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. File state for free 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. File state for free At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. File state for free The difference between the two prices was solely at the discretion of the buyer. File state for free The promoter was a willing seller for $10,000. File state for free 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. File state for free Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. File state for free However, there must be a reasonable relationship between the replacement cost and the FMV. File state for free The replacement cost is the amount it would cost to replace the donated item on the valuation date. File state for free Often there is no relationship between the replacement cost and the FMV. File state for free If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. File state for free To determine the replacement cost of the donated property, find the “estimated replacement cost new. File state for free ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. File state for free 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. File state for free ” 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. File state for free For an expert's opinion to deserve much weight, the facts must support the opinion. File state for free For additional information, see Appraisals, later. File state for free Table 1. File state for free Factors That Affect FMV IF the factor you are considering is. File state for free . File state for free . File state for free THEN you should ask these questions. File state for free . File state for free . File state for free     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. File state for free 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. File state for free When you rely on sales of comparable property, the sales must have been made in an open market. File state for free 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. File state for free For example, liquidation sale prices usually do not indicate the FMV. File state for free 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. File state for free Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. File state for free However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. File state for free 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. File state for free Example. File state for free You give a rare, old book to your former college. File state for free The book is a third edition and is in poor condition because of a missing back cover. File state for free 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. File state for free Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. File state for free Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. File state for free Future Events You may not consider unexpected events happening after your donation of property in making the valuation. File state for free 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. File state for free Example. File state for free You give farmland to a qualified charity. File state for free The transfer provides that your mother will have the right to all income and full use of the property for her life. File state for free 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. File state for free You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. File state for free 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. File state for free Example. File state for free You give all your rights in a successful patent to your favorite charity. File state for free Your records show that before the valuation date there were three stages in the patent's history of earnings. File state for free First, there was rapid growth in earnings when the invention was introduced. File state for free Then, there was a period of high earnings when the invention was being exploited. File state for free Finally, there was a decline in earnings when competing inventions were introduced. File state for free The entire history of earnings may be relevant in estimating the future earnings. File state for free However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. File state for free The market conditions at those times do not represent the condition of the market at the valuation date. File state for free What is most significant is the trend of decline in earnings up to the valuation date. File state for free For more information about donations of patents, see Patents, later. File state for free Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. File state for free For information on appraisals, see Appraisals, later. File state for free Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. File state for free Such used property may have little or no market value because of its worn condition. File state for free It may be out of style or no longer useful. File state for free You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. File state for free 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. File state for free See Deduction over $500 for certain clothing or household items, later. File state for free If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. File state for free Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. File state for free Valuation of items of clothing does not lend itself to fixed formulas or methods. File state for free 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. File state for free You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. File state for free 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. File state for free See Deduction over $500 for certain clothing or household items, later. File state for free For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. File state for free 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. File state for free 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. File state for free If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. File state for free The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. File state for free Sentimental personal value has no effect on FMV. File state for free But if the jewelry was owned by a famous person, its value might increase. File state for free 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. File state for free Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. File state for free Art valued at $20,000 or more. File state for free   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. File state for free 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. File state for free Art valued at $50,000 or more. File state for free   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. File state for free You must request the statement before filing the tax return that reports the donation. File state for free Your request must include the following. File state for free A copy of a qualified appraisal of the item. File state for free See Qualified Appraisal, later. File state for free 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. File state for free Add $250 for each item in excess of three. File state for free A completed Form 8283, Section B. File state for free The location of the IRS territory that has examination responsibility for your return. File state for free If your request lacks essential information, you will be notified and given 30 days to provide the missing information. File state for free   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. File state for free O. File state for free Box 27720 McPherson Station Washington, DC 20038 Refunds. File state for free   You can withdraw your request for a Statement of Value at any time before it is issued. File state for free However, the IRS will not refund the user fee if you do. File state for free   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. File state for free Authenticity. File state for free   The authenticity of the donated art must be determined by the appraiser. File state for free Physical condition. File state for free   Important items in the valuation of antiques and art are physical condition and extent of restoration. File state for free These have a significant effect on the value and must be fully reported in an appraisal. File state for free An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. File state for free Art appraisers. File state for free   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. File state for free Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. File state for free 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. File state for free They can report more recent comparable sales to support their opinion. File state for free   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. File state for free It lists museums both by state and by category. File state for free   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. File state for free The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. File state for free You may be able to find a qualified appraiser on the Internet. File state for free You may also contact associations of dealers for guidance. File state for free 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. File state for free Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. File state for free Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. File state for free Reference material. File state for free   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. File state for free When using one of these price guides, you must use the current edition at the date of contribution. File state for free However, these sources are not always reliable indicators of FMV and should be supported by other evidence. File state for free   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. File state for free The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. File state for free The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. File state for free If you are donating a valuable collection, you should get an appraisal. File state for free 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. File state for free Stamp collections. File state for free   Most libraries have catalogs or other books that report the publisher's estimate of values. File state for free Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. File state for free Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. File state for free Coin collections. File state for free   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. File state for free Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. File state for free Another important factor is the coin's condition. File state for free 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. File state for free   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. File state for free Books. File state for free   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. File state for free This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. File state for free Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. File state for free Modest value of collection. File state for free   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. File state for free   A book that is very old, or very rare, is not necessarily valuable. File state for free There are many books that are very old or rare, but that have little or no market value. File state for free Condition of book. File state for free   The condition of a book may have a great influence on its value. File state for free Collectors are interested in items that are in fine, or at least good, condition. File state for free When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. File state for free Other factors. File state for free   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). File state for free Collectors usually want first editions of books. File state for free However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. File state for free Manuscripts, autographs, diaries, and similar items. File state for free   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. File state for free The writings of unknowns also may be of value if they are of unusual historical or literary importance. File state for free Determining the value of such material is difficult. File state for free 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. File state for free The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. File state for free Signatures. File state for free   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. File state for free But complete sets of the signatures of U. File state for free S. File state for free presidents are in demand. File state for free Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. File state for free 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. File state for free Prices are reported for each make, model, and year. File state for free These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. File state for free The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. File state for free But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. File state for free These publications are sometimes available from public libraries or at a bank, credit union, or finance company. File state for free You can also find pricing information about used cars on the Internet. File state for free 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. File state for free 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. File state for free 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. File state for free Example. File state for free You donate a used car in poor condition to a local high school for use by students studying car repair. File state for free A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. File state for free However, the guide shows the price for a private party sale of the car is only $750. File state for free The FMV of the car is considered to be no more than $750. File state for free Boats. File state for free   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. File state for free More information. File state for free   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. File state for free This rule applies if the claimed value of the donated vehicle is more than $500. File state for free In certain cases, you can deduct the vehicle's FMV. File state for free For details, see Publication 526. File state for free 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. File state for free For more information, see Publication 526. File state for free 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. File state for free 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. File state for free Generally, this means your deduction is the lesser of the property's FMV or its basis. File state for free For details, see Publication 526. File state for free Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. File state for free See Date of contribution, earlier, under What Is Fair Market Value (FMV). File state for free Selling prices on valuation date. File state for free   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. File state for free For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. File state for free You get the average price by adding $11 and $9 and dividing the sum by 2. File state for free No sales on valuation date. File state for free   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. File state for free Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. File state for free Example. File state for free   On the day you gave stock to a qualified organization, there were no sales of the stock. File state for free 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. File state for free 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. File state for free   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. File state for free This applies if these prices are published in a generally available listing or publication of general circulation. File state for free 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. File state for free See also Unavailable prices or closely held corporation, later. File state for free Bid and asked prices on valuation date. File state for free   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. File state for free Example. File state for free 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. File state for free The FMV is $15, the average price between the bid and asked prices. File state for free No prices on valuation date. File state for free   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. File state for free Both dates must be within a reasonable period. File state for free 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. File state for free Example. File state for free On the day you gave stock to a qualified organization, no prices were available. File state for free Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. File state for free 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. File state for free   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. File state for free Large blocks of stock. File state for free   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. File state for free On the other hand, market forces may exist that will afford higher prices for large blocks of stock. File state for free 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. File state for free Unavailable prices or closely held corporation. File state for free   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. File state for free For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. File state for free For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. File state for free Other factors. File state for free   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. File state for free For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. File state for free   You should keep complete financial and other information on which the valuation is based. File state for free 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. File state for free Restricted securities. File state for free   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. File state for free These restricted securities usually trade at a discount in relation to freely traded securities. File state for free   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. File state for free Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. File state for free The appraiser must be thoroughly trained in the application of appraisal principles and theory. File state for free 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. File state for free 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. File state for free 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. File state for free In general, there are three main approaches to the valuation of real estate. File state for free An appraisal may require the combined use of two or three methods rather than one method only. File state for free 1. File state for free Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. File state for free 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. File state for free 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. File state for free , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. File state for free 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. File state for free The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. File state for free 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. File state for free 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. File state for free 2. File state for free 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. File state for free The key elements are the determination of the income to be capitalized and the rate of capitalization. File state for free 3. File state for free Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. File state for free 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. File state for free Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. File state for free Generally, this method serves to support the value determined from other methods. File state for free When the replacement cost method is applied to improved realty, the land and improvements are valued separately. File state for free 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. File state for free This cost represents the total cost of labor and material, overhead, and profit. File state for free 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. File state for free 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. File state for free 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. File state for free The value of the goodwill of the business should also be taken into consideration. File state for free You should keep complete financial and other information on which you base the valuation. File state for free 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. File state for free 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. File state for free The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. File state for free To determine present value, you must know the applicable interest rate and use actuarial tables. File state for free Interest rate. File state for free   The applicable interest rate varies. File state for free It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. File state for free The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. File state for free You can call the IRS office at 1-800-829-1040 to obtain this rate. File state for free Actuarial tables. File state for free   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. File state for free   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). File state for free 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. File state for free 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. File state for free   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. File state for free Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. File state for free You can download Publications 1457 and 1458 from www. File state for free irs. File state for free gov. File state for free In addition, they are available for purchase via the website of the U. File state for free S. File state for free Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. File state for free O. File state for free 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. File state for free 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. File state for free 664-4(e), and other transfers in Regulation 20. File state for free 2031-7(d)(6). File state for free Special factors. File state for free   If you need a special factor for an actual transaction, you can request a letter ruling. File state for free Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. File state for free Also include copies of the relevant instruments. File state for free IRS charges a user fee for providing special factors. File state for free   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. File state for free R. File state for free B. File state for free 1. File state for free Revenue Procedure 2006-1 is available at www. File state for free irs. File state for free gov/irb/2006-01_IRB/ar06. File state for free html. File state for free   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. File state for free 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. File state for free 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. File state for free 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. File state for free 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. File state for free 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. File state for free 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. File state for free To determine this value, you must know the FMV of the property on the date of the contribution. File state for free Multiply this value by the appropriate factor. File state for free Publications 1457 and 1458 contain these factors. File state for free You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). File state for free You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. File state for free See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. File state for free You can download Publication 1459 from www. File state for free irs. File state for free gov. File state for free 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. File state for free 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. File state for free This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. File state for free Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. File state for free For more information, see section 1. File state for free 170A-12 of the Income Tax Regulations. File state for free 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. File state for free It must extend over the entire term of your interest in the property. File state for free 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. File state for free You can claim a deduction for the contribution if you do not have any other interest in the property. File state for free To figure the value of a contribution involving a partial interest, see Publication 1457. File state for free 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. File state for free 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. File state for free Qualified organization. File state for free   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. File state for free , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. File state for free The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. File state for free Conservation purposes. File state for free   Your contribution must be made only for one of the following conservation purposes. File state for free Preserving land areas for outdoor recreation by, or for the education of, the general public. File state for free Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. File state for free Preserving open space, including farmland and forest land, if it yields a significant public benefit. File state for free It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. File state for free Preserving a historically important land area or a certified historic structure. File state for free There must be some visual public access to the property. File state for free 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. File state for free Building in registered historic district. File state for free   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. File state for free 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. File state for free 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. File state for free 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. File state for free   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. File state for free See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. File state for free Qualified real property interest. File state for free   This is any of the following interests in real property. File state for free 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). File state for free A remainder interest. File state for free A restriction (granted in perpetuity) on the use that may be made of the real property. File state for free Valuation. File state for free   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. File state for free If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. File state for free If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. File state for free   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. File state for free If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. File state for free   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. File state for free 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. File state for free   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. File state for free You should also consider any zoning, conservation, or historical preservation laws that would restrict development. File state for free Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. File state for free Example. File state for free   You own 10 acres of farmland. File state for free Similar land in the area has an FMV of $2,000 an acre. File state for free However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. File state for free Your county wants to preserve open space and prevent further development in your area. File state for free   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. File state for free 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. File state for free More information. File state for free   For more information about qualified conservation contributions, see Publication 526. File state for free Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. File state for free (There is one exception, described next, for certain clothing and household items. File state for free ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. File state for free There are exceptions. File state for free See Deductions of More Than $5,000, later. File state for free 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. File state for free An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. File state for free 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. File state for free The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. File state for free The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. File state for free All facts associated with the donation must be considered. File state for free Deduction over $500 for certain clothing or household items. File state for free   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. File state for free See Household Goods and Used Clothing, earlier. File state for free Cost of appraisals. File state for free   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. File state for free 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. File state for free 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. File state for free There are exceptions, discussed later. File state for free You should keep the appraiser's report with your written records. File state for free Records are discussed in Publication 526. File state for free 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. File state for free 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. File state for free 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. File state for free Exceptions. File state for free   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. File state for free   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. File state for free Publicly traded securities. File state for free   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. File state for free Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. File state for free   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. File state for free   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. File state for free 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. File state for free   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. File state for free Bid and asked quotations are not taken into account. File state for free   The computation period is weekly during October through December and monthly during January through September. File state for free 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. File state for free Nonpublicly traded stock. File state for free   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. File state for free However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. File state for free 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. File state for free This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. File state for free 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. File state for free 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. File state for free You must also complete Form 8283, Section B, and attach it to your tax return. File state for free See Deductions of More Than $5,000, earlier. File state for free 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. File state for free 170A-13(c)(3) and Notice 2006-96, 2006-46 I. File state for free R. File state for free B. File state for free 902 (available at www. File state for free irs. File state for free gov/irb/2006-46_IRB/ar13. File state for free 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). File state for free 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. File state for free 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. File state for free Form 8283, Section B, must be attached to your tax return. File state for free 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. File state for free There are four exceptions. File state for free If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. File state for free See Paintings, Antiques, and Other Objects of Art, earlier. File state for free If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. File state for free See Deductions of More Than $500,000, earlier. File state for free 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. File state for free See Deduction over $500 for certain clothing or household items, earlier. File state for free 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. File state for free See Building in registered historic district, earlier. File state for free Prohibited appraisal fee. File state for free   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. File state for free 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. File state for free However, appraisals are not disqualified when an otherwise prohi