14.6 What Kind of Property Are You Donating?

Generally, a deduction for the fair market value of donated property may be claimed, but the tax law does not treat all donations of appreciated property in the same way. Whether the full amount of the fair market value of the property is deductible depends on the type of property donated, your holding period, the nature of the philanthropy, and the use to which the property is put by the philanthropy. For donations of motor vehicles, boats, or airplanes valued at over $500, special deduction restrictions and substantiation restrictions apply (14.7).

Save records to support the market value and cost of donated property. Get a receipt or letter from the charitable organization acknowledging and describing the gift. You must get a receipt for donations of property valued at $250 or more (14.14). Lack of substantiation may disqualify an otherwise valid deduction.

If the total claimed value for all of your property donations exceeds $500, you must report the donations on Form 8283 (14.15), which you attach to Schedule A, Form 1040. If the claimed value of a donated item (or group of similar items) exceeds $5,000, you generally must base the valuation on a written appraisal from a qualified appraiser; see 14.15 for details on the appraisal requirements.

Figuring value.

When donating securities listed on a public exchange, fair market value is readily ascertainable from newspaper listings of stock prices. It is the average of the high and ...

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