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Free Sites For Filing State Income Taxes

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Free Sites For Filing State Income Taxes

Free sites for filing state income taxes 20. Free sites for filing state income taxes   Standard Deduction Table of Contents What's New Introduction Standard Deduction Amount Standard Deduction for Dependents Who Should ItemizeWhen to itemize. Free sites for filing state income taxes Married persons who filed separate returns. Free sites for filing state income taxes What's New Standard deduction increased. Free sites for filing state income taxes  The standard deduction for some taxpayers who do not itemize their deductions on Schedule A (Form 1040) is higher for 2013 than it was for 2012. Free sites for filing state income taxes The amount depends on your filing status. Free sites for filing state income taxes You can use the 2013 Standard Deduction Tables in this chapter to figure your standard deduction. Free sites for filing state income taxes Introduction This chapter discusses the following topics. Free sites for filing state income taxes How to figure the amount of your standard deduction. Free sites for filing state income taxes The standard deduction for dependents. Free sites for filing state income taxes Who should itemize deductions. Free sites for filing state income taxes Most taxpayers have a choice of either taking a standard deduction or itemizing their deductions. Free sites for filing state income taxes If you have a choice, you can use the method that gives you the lower tax. Free sites for filing state income taxes The standard deduction is a dollar amount that reduces your taxable income. Free sites for filing state income taxes It is a benefit that eliminates the need for many taxpayers to itemize actual deductions, such as medical expenses, charitable contributions, and taxes, on Schedule A (Form 1040). Free sites for filing state income taxes The standard deduction is higher for taxpayers who: Are 65 or older, or Are blind. Free sites for filing state income taxes You benefit from the standard deduction if your standard deduction is more than the total of your allowable itemized deductions. Free sites for filing state income taxes Persons not eligible for the standard deduction. Free sites for filing state income taxes   Your standard deduction is zero and you should itemize any deductions you have if: Your filing status is married filing separately, and your spouse itemizes deductions on his or her return, You are filing a tax return for a short tax year because of a change in your annual accounting period, or You are a nonresident or dual-status alien during the year. Free sites for filing state income taxes You are considered a dual-status alien if you were both a nonresident and resident alien during the year. Free sites for filing state income taxes Note. Free sites for filing state income taxes If you are a nonresident alien who is married to a U. Free sites for filing state income taxes S. Free sites for filing state income taxes citizen or resident alien at the end of the year, you can choose to be treated as a U. Free sites for filing state income taxes S. Free sites for filing state income taxes resident. Free sites for filing state income taxes (See Publication 519, U. Free sites for filing state income taxes S. Free sites for filing state income taxes Tax Guide for Aliens. Free sites for filing state income taxes ) If you make this choice, you can take the standard deduction. Free sites for filing state income taxes If an exemption for you can be claimed on another person's return (such as your parents' return), your standard deduction may be limited. Free sites for filing state income taxes See Standard Deduction for Dependents, later. Free sites for filing state income taxes Standard Deduction Amount The standard deduction amount depends on your filing status, whether you are 65 or older or blind, and whether an exemption can be claimed for you by another taxpayer. Free sites for filing state income taxes Generally, the standard deduction amounts are adjusted each year for inflation. Free sites for filing state income taxes The standard deduction amounts for most people are shown in Table 20-1. Free sites for filing state income taxes Decedent's final return. Free sites for filing state income taxes   The standard deduction for a decedent's final tax return is the same as it would have been had the decedent continued to live. Free sites for filing state income taxes However, if the decedent was not 65 or older at the time of death, the higher standard deduction for age cannot be claimed. Free sites for filing state income taxes Higher Standard Deduction for Age (65 or Older) If you are age 65 or older on the last day of the year and do not itemize deductions, you are entitled to a higher standard deduction. Free sites for filing state income taxes You are considered 65 on the day before your 65th birthday. Free sites for filing state income taxes Therefore, you can take a higher standard deduction for 2013 if you were born before January 2, 1949. Free sites for filing state income taxes Use Table 20-2 to figure the standard deduction amount. Free sites for filing state income taxes Higher Standard Deduction for Blindness If you are blind on the last day of the year and you do not itemize deductions, you are entitled to a higher standard deduction. Free sites for filing state income taxes Not totally blind. Free sites for filing state income taxes   If you are not totally blind, you must get a certified statement from an eye doctor (ophthalmologist or optometrist) that: You cannot see better than 20/200 in the better eye with glasses or contact lenses, or Your field of vision is 20 degrees or less. Free sites for filing state income taxes   If your eye condition is not likely to improve beyond these limits, the statement should include this fact. Free sites for filing state income taxes You must keep the statement in your records. Free sites for filing state income taxes   If your vision can be corrected beyond these limits only by contact lenses that you can wear only briefly because of pain, infection, or ulcers, you can take the higher standard deduction for blindness if you otherwise qualify. Free sites for filing state income taxes Spouse 65 or Older or Blind You can take the higher standard deduction if your spouse is age 65 or older or blind and: You file a joint return, or You file a separate return and can claim an exemption for your spouse because your spouse had no gross income and cannot be claimed as a dependent by another taxpayer. Free sites for filing state income taxes You cannot claim the higher standard deduction for an individual other than yourself and your spouse. Free sites for filing state income taxes Examples The following examples illustrate how to determine your standard deduction using Tables 20-1 and 20-2. Free sites for filing state income taxes Example 1. Free sites for filing state income taxes Larry, 46, and Donna, 33, are filing a joint return for 2013. Free sites for filing state income taxes Neither is blind, and neither can be claimed as a dependent. Free sites for filing state income taxes They decide not to itemize their deductions. Free sites for filing state income taxes They use Table 20-1. Free sites for filing state income taxes Their standard deduction is $12,200. Free sites for filing state income taxes Example 2. Free sites for filing state income taxes The facts are the same as in Example 1 except that Larry is blind at the end of 2013. Free sites for filing state income taxes Larry and Donna use Table 20-2. Free sites for filing state income taxes Their standard deduction is $13,400. Free sites for filing state income taxes Example 3. Free sites for filing state income taxes Bill and Lisa are filing a joint return for 2013. Free sites for filing state income taxes Both are over age 65. Free sites for filing state income taxes Neither is blind, and neither can be claimed as a dependent. Free sites for filing state income taxes If they do not itemize deductions, they use Table 20-2. Free sites for filing state income taxes Their standard deduction is $14,600. Free sites for filing state income taxes Standard Deduction for Dependents The standard deduction for an individual who can be claimed as a dependent on another person's tax return is generally limited to the greater of: $1,000, or The individual's earned income for the year plus $350 (but not more than the regular standard deduction amount, generally $6,100). Free sites for filing state income taxes However, if the individual is 65 or older or blind, the standard deduction may be higher. Free sites for filing state income taxes If you (or your spouse, if filing jointly) can be claimed as a dependent on someone else's return, use Table 20-3 to determine your standard deduction. Free sites for filing state income taxes Earned income defined. Free sites for filing state income taxes   Earned income is salaries, wages, tips, professional fees, and other amounts received as pay for work you actually perform. Free sites for filing state income taxes    For purposes of the standard deduction, earned income also includes any part of a scholarship or fellowship grant that you must include in your gross income. Free sites for filing state income taxes See Scholarships and fellowships in chapter 12 for more information on what qualifies as a scholarship or fellowship grant. Free sites for filing state income taxes Example 1. Free sites for filing state income taxes Michael is single. Free sites for filing state income taxes His parents can claim an exemption for him on their 2013 tax return. Free sites for filing state income taxes He has interest income of $780 and wages of $150. Free sites for filing state income taxes He has no itemized deductions. Free sites for filing state income taxes Michael uses Table 20-3 to find his standard deduction. Free sites for filing state income taxes He enters $150 (his earned income) on line 1, $500 ($150 + $350) on line 3, $1,000 (the larger of $500 and $1,000) on line 5, and $6,100 on line 6. Free sites for filing state income taxes His standard deduction, on line 7a, is $1,000 (the smaller of $1,000 and $6,100). Free sites for filing state income taxes Example 2. Free sites for filing state income taxes Joe, a 22-year-old full-time college student, can be claimed as a dependent on his parents' 2013 tax return. Free sites for filing state income taxes Joe is married and files a separate return. Free sites for filing state income taxes His wife does not itemize deductions on her separate return. Free sites for filing state income taxes Joe has $1,500 in interest income and wages of $3,800. Free sites for filing state income taxes He has no itemized deductions. Free sites for filing state income taxes Joe finds his standard deduction by using Table 20-3. Free sites for filing state income taxes He enters his earned income, $3,800 on line 1. Free sites for filing state income taxes He adds lines 1 and 2 and enters $4,150 on line 3. Free sites for filing state income taxes On line 5, he enters $4,150, the larger of lines 3 and 4. Free sites for filing state income taxes Because Joe is married filing a separate return, he enters $6,100 on line 6. Free sites for filing state income taxes On line 7a he enters $4,150 as his standard deduction because it is smaller than $6,100, the amount on line 6. Free sites for filing state income taxes Example 3. Free sites for filing state income taxes Amy, who is single, can be claimed as a dependent on her parents' 2013 tax return. Free sites for filing state income taxes She is 18 years old and blind. Free sites for filing state income taxes She has interest income of $1,300 and wages of $2,900. Free sites for filing state income taxes She has no itemized deductions. Free sites for filing state income taxes Amy uses Table 20-3 to find her standard deduction. Free sites for filing state income taxes She enters her wages of $2,900 on line 1. Free sites for filing state income taxes She adds lines 1 and 2 and enters $3,250 on line 3. Free sites for filing state income taxes On line 5, she enters $3,250, the larger of lines 3 and 4. Free sites for filing state income taxes Because she is single, Amy enters $6,100 on line 6. Free sites for filing state income taxes She enters $3,250 on line 7a. Free sites for filing state income taxes This is the smaller of the amounts on lines 5 and 6. Free sites for filing state income taxes Because she checked one box in the top part of the worksheet, she enters $1,500 on line 7b. Free sites for filing state income taxes She then adds the amounts on lines 7a and 7b and enters her standard deduction of $4,750 on line 7c. Free sites for filing state income taxes Example 4. Free sites for filing state income taxes Ed is single. Free sites for filing state income taxes His parents can claim an exemption for him on their 2013 tax return. Free sites for filing state income taxes He has wages of $7,000, interest income of $500, and a business loss of $3,000. Free sites for filing state income taxes He has no itemized deductions. Free sites for filing state income taxes Ed uses Table 20-3 to figure his standard deduction. Free sites for filing state income taxes He enters $4,000 ($7,000 - $3,000) on line 1. Free sites for filing state income taxes He adds lines 1 and 2 and enters $4,350 on line 3. Free sites for filing state income taxes On line 5 he enters $4,350, the larger of lines 3 and 4. Free sites for filing state income taxes Because he is single, Ed enters $6,100 on line 6. Free sites for filing state income taxes On line 7a he enters $4,350 as his standard deduction because it is smaller than $6,100, the amount on line 6. Free sites for filing state income taxes Who Should Itemize You should itemize deductions if your total deductions are more than the standard deduction amount. Free sites for filing state income taxes Also, you should itemize if you do not qualify for the standard deduction, as discussed earlier under Persons not eligible for the standard deduction . Free sites for filing state income taxes You should first figure your itemized deductions and compare that amount to your standard deduction to make sure you are using the method that gives you the greater benefit. Free sites for filing state income taxes You may be subject to a limit on some of your itemized deductions if your adjusted gross income is more than: $250,000 if single ($275,000 if head of household, $300,000 if married filing jointly or qualifying widow(er); or $150,000 if married filing separately). Free sites for filing state income taxes See chapter 29 or the instructions for Schedule A (Form 1040) for more information on figuring the correct amount of your itemized deductions. Free sites for filing state income taxes When to itemize. Free sites for filing state income taxes   You may benefit from itemizing your deductions on Schedule A (Form 1040) if you: Do not qualify for the standard deduction, or the amount you can claim is limited, Had large uninsured medical and dental expenses during the year, Paid interest and taxes on your home, Had large unreimbursed employee business expenses or other miscellaneous deductions, Had large uninsured casualty or theft losses, Made large contributions to qualified charities, or Have total itemized deductions that are more than the standard deduction to which you otherwise are entitled. Free sites for filing state income taxes These deductions are explained in chapters 21–28. Free sites for filing state income taxes    If you decide to itemize your deductions, complete Schedule A and attach it to your Form 1040. Free sites for filing state income taxes Enter the amount from Schedule A, line 29, on Form 1040, line 40. Free sites for filing state income taxes Electing to itemize for state tax or other purposes. Free sites for filing state income taxes   Even if your itemized deductions are less than your standard deduction, you can elect to itemize deductions on your federal return rather than take the standard deduction. Free sites for filing state income taxes You may want to do this if, for example, the tax benefit of itemizing your deductions on your state tax return is greater than the tax benefit you lose on your federal return by not taking the standard deduction. Free sites for filing state income taxes To make this election, you must check the box on line 30 of Schedule A. Free sites for filing state income taxes Changing your mind. Free sites for filing state income taxes   If you do not itemize your deductions and later find that you should have itemized — or if you itemize your deductions and later find you should not have — you can change your return by filing Form 1040X, Amended U. Free sites for filing state income taxes S. Free sites for filing state income taxes Individual Income Tax Return. Free sites for filing state income taxes See Amended Returns and Claims for Refund in chapter 1 for more information on amended returns. Free sites for filing state income taxes Married persons who filed separate returns. Free sites for filing state income taxes   You can change methods of taking deductions only if you and your spouse both make the same changes. Free sites for filing state income taxes Both of you must file a consent to assessment for any additional tax either one may owe as a result of the change. Free sites for filing state income taxes    You and your spouse can use the method that gives you the lower total tax, even though one of you may pay more tax than you would have paid by using the other method. Free sites for filing state income taxes You both must use the same method of claiming deductions. Free sites for filing state income taxes If one itemizes deductions, the other should itemize because he or she will not qualify for the standard deduction. Free sites for filing state income taxes See Persons not eligible for the standard deduction , earlier. Free sites for filing state income taxes 2013 Standard Deduction Tables If you are married filing a separate return and your spouse itemizes deductions, or if you are a dual-status alien, you cannot take the standard deduction even if you were born before January 2, 1949, or are blind. Free sites for filing state income taxes Table 20-1. Free sites for filing state income taxes Standard Deduction Chart for Most People* If your filing status is. Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes Your standard deduction is: Single or Married filing separately $6,100 Married filing jointly or Qualifying widow(er) with dependent child 12,200 Head of household 8,950 *Do not use this chart if you were born before January 2, 1949, are blind, or if someone else can claim you (or your spouse if filing jointly) as a dependent. Free sites for filing state income taxes Use Table 20-2 or 20-3 instead. Free sites for filing state income taxes Table 20-2. Free sites for filing state income taxes Standard Deduction Chart for People Born Before January 2, 1949, or Who are Blind Check the correct number of boxes below. Free sites for filing state income taxes Then go to the chart. Free sites for filing state income taxes You: Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked   IF  your filing status is. Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes AND the number in the box above is. Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes THEN your standard deduction is. Free sites for filing state income taxes . Free sites for filing state income taxes . Free sites for filing state income taxes Single 1 $7,600   2 9,100 Married filing jointly 1 $13,400 or Qualifying 2 14,600 widow(er) with 3 15,800 dependent child 4 17,000 Married filing 1 $7,300 separately 2 8,500   3 9,700   4 10,900 Head of household 1 $10,450   2 11,950 *If someone else can claim you (or your spouse if filing jointly) as a dependent, use Table 20-3 instead. Free sites for filing state income taxes Table 20-3. Free sites for filing state income taxes Standard Deduction Worksheet for Dependents Use this worksheet only if someone else can claim you (or your spouse if filing jointly) as a dependent. Free sites for filing state income taxes Check the correct number of boxes below. Free sites for filing state income taxes Then go to the worksheet. Free sites for filing state income taxes You:   Born before January 2, 1949 □ Blind □ Your spouse, if claiming spouse's exemption: Born before January 2, 1949 □ Blind □ Total number of boxes checked 1. Free sites for filing state income taxes Enter your earned income (defined below). Free sites for filing state income taxes If none, enter -0-. Free sites for filing state income taxes 1. Free sites for filing state income taxes   2. Free sites for filing state income taxes Additional amount. Free sites for filing state income taxes 2. Free sites for filing state income taxes $350 3. Free sites for filing state income taxes Add lines 1 and 2. Free sites for filing state income taxes 3. Free sites for filing state income taxes   4. Free sites for filing state income taxes Minimum standard deduction. Free sites for filing state income taxes 4. Free sites for filing state income taxes $1,000 5. Free sites for filing state income taxes Enter the larger of line 3 or line 4. Free sites for filing state income taxes 5. Free sites for filing state income taxes   6. Free sites for filing state income taxes Enter the amount shown below for your filing status. Free sites for filing state income taxes Single or Married filing separately—$6,100 Married filing jointly—$12,200 Head of household—$8,950 6. Free sites for filing state income taxes   7. Free sites for filing state income taxes Standard deduction. Free sites for filing state income taxes         a. Free sites for filing state income taxes Enter the smaller of line 5 or line 6. Free sites for filing state income taxes If born after January 1, 1949, and not blind, stop here. Free sites for filing state income taxes This is your standard deduction. Free sites for filing state income taxes Otherwise, go on to line 7b. Free sites for filing state income taxes 7a. Free sites for filing state income taxes     b. Free sites for filing state income taxes If born before January 2, 1949, or blind, multiply $1,500 ($1,200 if married) by the number in the box above. Free sites for filing state income taxes 7b. Free sites for filing state income taxes     c. Free sites for filing state income taxes Add lines 7a and 7b. Free sites for filing state income taxes This is your standard deduction for 2013. Free sites for filing state income taxes 7c. Free sites for filing state income taxes   Earned income includes wages, salaries, tips, professional fees, and other compensation received for personal services you performed. Free sites for filing state income taxes It also includes any amount received as a scholarship that you must include in your income. Free sites for filing state income taxes Prev  Up  Next   Home   More Online Publications
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The Free Sites For Filing State Income Taxes

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