What this line means
The fair market value of the donated property as determined by a qualified appraiser. This is the value you claim as your charitable deduction (subject to AGI percentage limits). The appraiser must be a qualified appraiser who follows Uniform Standards of Professional Appraisal Practice (USPAP) and has no conflict of interest with the donor or the donee organization.
Does this apply to you?
- You donated property worth more than $5,000 and obtained a qualified appraisal
- You need to enter the appraised value that will serve as your charitable deduction amount
- You donated real estate, art, or other property requiring professional valuation
Easy to overlook
The appraiser’s fee cannot be based on a percentage of the appraised value A qualified appraisal must be performed for a flat fee. If the appraiser charges a percentage of the appraised value (for example, 5% of whatever the appraisal comes to), the appraisal is disqualified because the appraiser has a financial incentive to inflate the value. A disqualified appraisal means a disallowed deduction, regardless of how accurate the value is. 1 IRS Publication 561 — Determining the Value of Donated Property
Noncash deductions over $500,000 require attaching the full appraisal For donations exceeding $500,000 (or $20,000 for artwork), you must attach the complete qualified appraisal to your tax return, not just the summary on Form 8283. For amounts between $5,000 and $500,000, the appraisal summary on Section B is sufficient, but you must keep the full appraisal in your records. 2 IRS Form 8283 instructions — Qualified appraisal requirements
Watch out for this
Using an unqualified appraiser. The IRS defines a qualified appraiser as someone who has earned an appraisal designation from a recognized professional organization or meets minimum education and experience requirements, and who regularly performs appraisals for compensation. Your real estate agent, a friend who collects art, or a charity employee does not qualify. Using an unqualified appraiser voids the appraisal and the deduction.
Footnotes
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IRS Publication 561, Determining the Value of Donated Property, Qualified Appraisal. https://www.irs.gov/pub/irs-pdf/p561.pdf ↩
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IRS Form 8283 Instructions, Section B, Appraisal Requirements. https://www.irs.gov/instructions/i8283 ↩