Charitable Donation Appraisal

Q: When is a qualified appraisal required for a charitable donation?

A: The IRS requires a qualified appraisal for non-cash charitable contributions of property valued at more than $5,000 (per item or group of similar items). The appraisal must be completed no earlier than 60 days before the donation and no later than the due date of the tax return on which the deduction is first claimed.

Q: What is IRS Form 8283 and how does the appraisal relate to it?

A: Form 8283 (Noncash Charitable Contributions) must be attached to the donor’s tax return when claiming a deduction over $500. For deductions over $5,000, the form must be completed and signed by both the appraiser and the donee organization. The Expert Appraisal Company prepares appraisal reports that satisfy all IRS requirements for Form 8283 completion.

Q: What does ‘fair market value’ mean in the context of a charitable donation?

A: Fair market value is the price a willing buyer would pay a willing seller in an arm’s-length transaction, with neither under pressure and both reasonably informed. For donated property, this is the value the IRS uses to determine the allowable deduction – not what the donor paid for the item, and not what it would cost to replace it.

Q: What types of donated property do you appraise?

A: We appraise fine art, antiques, furniture, decorative arts, jewelry, collectibles, household contents, FF&E including information, medical, A/V and office equipment, musical instruments, books, and other personal property commonly donated to charities, museums, hospitals, libraries, religious organizations and other non-profits.

Q: Can you appraise donated property for a museum or institution?

A: Yes. Museum-quality donations of significant and rare property often involve more complex methodology and detailed reporting. We are experienced in appraising significant works for institutional donation, in circumstances with minimal precedent, and can explore a multitude of research approaches while still preparing clear and defensible reports.

Q: What happens if I don’t obtain a qualified appraisal?

A: If the IRS audits a charitable donation deduction and finds that a proper qualified appraisal was not obtained, the deduction may be disallowed in full, regardless of the actual value of the donated property. A compliant appraisal is the donor’s primary protection against this outcome.

Q: How is the appraisal fee determined?

A: Fees are hourly and are determined by the scope of the engagement. This includes the number of items, complexity of research required, methodology, and circumstances. Fees are never calculated as a percentage of appraised value, which is prohibited under IRS and USPAP standards.

Q: Can the appraiser sign Form 8283 directly?

A: Yes. As a Qualified Appraiser under IRS regulations, we sign the appraiser’s declaration on Section B of Form 8283, providing our credentials, declaration of independence, and certification that the appraisal meets IRS requirements.