If you have decided to make the generous gift of donating your art or antiques to a charity, museum or institution, you must consider the regulations and rules set forth by the IRS if you want to claim a tax deduction. Below, you will find some basic information to keep in mind when donating your property and claiming a tax deduction. When reading the information below, please keep in mind that you should always consult your tax professional as this is not tax advice.
A 100% tax deduction of the fair market value may be claimed when property is donated to a qualifying organization. Fair market value is defined by the IRS as “the price at which property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts”
An appraisal submitted to the IRS must be done by a “qualified” appraiser. A “qualified” appraiser is defined by the IRS as one who has
-Has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or has met certain minimum education and experience requirements
-The individual regularly prepares appraisals for which he or she is paid.
-The individual demonstrates verifiable education and experience in valuing the type of property being appraised
-The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal
-The individual is not an excluded individual
A qualified appraisal is an appraisal document that contains the following, as per the IRS
-Is made, signed, and dated by a qualified appraiser in accordance with generally accepted appraisal standards
-Meets the relevant requirements of Regulations section 1.170A-13(c)(3) and Notice 2006-96, 2006- 46 I.R.B. 902
-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
-Includes certain information
Form 8283, section B, part III must be filled out by the appraiser with other sections being completed by the donor and receiving organization
Donations up to $500 may be donated without the completion of form 8283
Donations up to $5,000 must have form 8283 submitted along with the tax return
Donations over $5,000 must have an appraisal on file and have form 8283 submitted along with the tax return. The appraisal is not required to be submitted but must be on file in case the donor is ever audited. Many donors will often submit the appraisal along with the tax return to ensure that the IRS guidelines have been met.
Donations over $20,000 must have an appraisal submitted along certain types of photographs along with form 8283 and the tax return.
For further information from the IRS, read
Publication 561 on Determining Value of Donated Property: https://www.irs.gov/publications/p561/ar02.html#d0e1653
Publication 526 on Charitable Contributions: