As the year-end donor season approaches, we want to remind you that the donor is required to pay for an appraisal for any property, real or personal, for which the donor wants to take a deduction of $5,000 or more.
We often see agreements between a donor and non-profit organization whereby the non-profit agrees to pay for a qualified appraisal of the property to be donated. IRS rules does not permit this, notwithstanding the terms of any such agreement. More specifically, the donor is required to file Form 8283 with her tax return to take a charitable deduction for donated property, which requires her to get a qualified appraisal of real and personal property. Not all donations require an appraisal, such as cash or marketable securities. But where an appraisal is required, it is up to the donor to obtain and pay for it.