An excellent way to help those in need as well as to give back to society is by donating to charitable organizations. Donations are an important aspect of charitable work. They can easily be claimed as charitable contribution deductions on your tax return. However, to claim a deduction, it is essential to carry out an accurate charitable donation appraisal of the value of the donated property or item.
What is a Charitable Donation Appraisal?
The IRS requires a qualified appraisal for donations of art or other specific forms of donated property. When a donor wants to donate an item and claim a deduction, they must request a statement from the qualified appraiser who has signed the appraisal.
A charitable donation appraisal is an important process used to determine the fair market value (FMV) of a charitable contribution. It is used by charities and other organizations to assess the market value of donated items for tax-related purposes, as well as for internal recordkeeping and reporting.
For a charitable donation appraisal to be accurate and genuine it should include the following 8 essential requirements:
1. Description of the Donation:
It is important to provide a detailed receipt of the donation, including the date, amount, and description of the items donated. This information is essential for the appraisal process, as it helps to determine the FMV of the contribution. If the donation is a collection of items, it should include a comprehensive inventory of the items and their individual descriptions. Photos of the donated items are also necessary during the appraisal process. This allows the appraiser to get a better understanding of the condition, quality, and value of the items.
2. Identification of the Donor:
The qualified appraisal should include the name, address, and any other relevant contact information of the donor. If the donor is a corporation, it should include the corporate name and any other relevant contact information. Failure to meet this requirement will cause the appraisal to remain incomplete.
3. Date of Donation:
Yes, this date is important. The date on which the donation was made must be included in the appraisal report. This is not only necessary for tax purposes, but it also helps verify the authenticity of the appraisal.
4. Valuation Method:
For the qualified appraisal to be accurate it should describe in detail the method used to determine the FMV of the donated item or items. This should include a detailed explanation of the methodology used to arrive at a proper conclusion of the charitable donation appraisal.
5. Appraiser’s Credentials:
It is essential that the appraiser’s credentials can be identified, including any relevant certifications or other qualifications. Why? Because this helps ensure that the appraisal is being conducted by an appraiser who not only has the knowledge but is also aware of the existing appraisal standards.
6. Appraisal Fee:
The donation appraisal should include the fee charged by the appraiser for their services. It is important to include this piece of information to ensure that the appraisal is accurate and that the appraiser is being compensated for their work.
7. Signature of the Appraiser:
It is a must for the appraiser’s signature to be present on the appraisal report. It helps to verify the authenticity of the document. This is important for tax purposes and for internal recordkeeping and reporting.
8. Appraisal Report:
This is a document that outlines the appraised value of the donated items. In an accurate charitable donation appraisal, this report should include descriptions of the items, the FMV, and the estimated value of the items for tax purposes.
Appraisily Can Help You
Charitable donations are a great way to support a cause you care about while also receiving tax benefits. However, it is important to ensure that your donation is accurately appraised to avoid any legal issues.
If you are looking for expert qualified appraisers for your charitable donation get in touch with professionals at Appraisily.