For What It's Worth ...
Q. I've donated some furniture to a charity. Do I need an appraisal to be able to take a deduction on my federal income taxes?
A. Maybe. Check with your tax attorney and/or CPA. Here are some things to keep in mind:
- The organization receiving your gift must be a qualifying charitable organization.
- This qualifying charitable organization must have a mission which is related to the property being donated. You can't take a tax deduction for donating a sewing machine to a hospital.
- If you place restrictions on what the qualifying charitable organization can do with the property (i.e., if you tell them they can't sell it), the Fair Market Value (FMV) must reflect that restriction. To determine how much a taxpayer may deduct, this FMV determination must first be made.
IRS Form 8283 is required if your non-cash charitable contributions are more than $500.00 for the year. For donations between $500.00 and $5,000.00, no appraisal is required, but the taxpayer must complete Section A on the 8283 Form. Section B is for items (or groups of similar items) with a FMV of more than $5,000.00 and an appraisal by a qualified appraiser is required. However, the appraisal does not need to be attached to the tax return unless the total deduction (usually for art) is $20,000.00 or more. The appraiser's signature, as well as your own and one from the qualifying charitable organization, is required on Form 8283 for donations exceeding $5,000.00.
This is a complex subject for a limited space. I encourage you to seek the advice of your tax professional.