HERNDON, Va. — Even though the economy has put a damper on charitable donations this year, the holiday season is still the time when most people make donations, allowing them to get end of the year tax write-offs.
In the last few years, the IRS has greatly increased its scrutiny of charitable donations so taxpayers need to review the regulations, document donations properly, and get donations appraised by a “qualified appraiser” when required by the tax code.
The IRS requires that a “qualified appraiser” prepare a “qualified appraisal” for individual household items donated to charity which are worth more than $500. This is true also for other donated items such as art and antiques that have a fair market value of more than $5,000. Taxpayers need to attach IRS form 8283 with appraisals. The IRS offers tips for deducting charitable contributions on its Web site.
“The best way to find a ‘qualified appraiser’ is to use an appraiser who is accredited by a ‘recognized professional appraisal organization’
Taxpayers should also make sure they are submitting an appraisal that was prepared using the correct valuation method for charitable contributions. All appraisals done for the Internal Revenue Service conclude the fair market value of the item or items. The fair market value is the amount that the item would sell for on the open market at the time of donation. Fair market value takes into account the condition of the piece or pieces, the value of sales of similar properties at the time, and the market for those types of items.
For more information, or to find an accredited appraiser near you or to learn more about appraisals, log on to www.appraisers.org or call 1-800-ASA-VALU.
