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Form 1040ez

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Form 1040ez

Form 1040ez Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. Form 1040ez Stock. Form 1040ez Options. Form 1040ez Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). Form 1040ez What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. Form 1040ez Fair market value. Form 1040ez   Fair market value (FMV) is the price that property would sell for on the open market. Form 1040ez It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. Form 1040ez If you put a restriction on the use of property you donate, the FMV must reflect that restriction. Form 1040ez Example 1. Form 1040ez If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Form 1040ez Usually, such items are worth far less than what you paid for them. Form 1040ez Example 2. Form 1040ez If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. Form 1040ez Factors. Form 1040ez   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. Form 1040ez These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. Form 1040ez   These factors are discussed later. Form 1040ez Also, see Table 1 for a summary of questions to ask as you consider each factor. Form 1040ez Date of contribution. Form 1040ez   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. Form 1040ez Stock. Form 1040ez   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. Form 1040ez If the certificate is mailed and received through the regular mail, it is the date of mailing. Form 1040ez If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. Form 1040ez Options. Form 1040ez   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. Form 1040ez The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. Form 1040ez Example. Form 1040ez You grant an option to a local university, which is a qualified organization, to buy real property. Form 1040ez Under the option, the university could buy the property at any time during a 2-year period for $40,000. Form 1040ez The FMV of the property on the date the option is granted is $50,000. Form 1040ez In the following tax year, the university exercises the option. Form 1040ez The FMV of the property on the date the option is exercised is $55,000. Form 1040ez Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. Form 1040ez Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. Form 1040ez Usually it is not that simple. Form 1040ez Using such formulas, etc. Form 1040ez , seldom results in an acceptable determination of FMV. Form 1040ez There is no single formula that always applies when determining the value of property. Form 1040ez This is not to say that a valuation is only guesswork. Form 1040ez You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. Form 1040ez For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. Form 1040ez When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. Form 1040ez On the other hand, it may be an antique, the value of which could not be determined by using any formula. Form 1040ez Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. Form 1040ez However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. Form 1040ez The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. Form 1040ez Example. Form 1040ez Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. Form 1040ez The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. Form 1040ez The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. Form 1040ez Tom gave the gems to a qualified charity 13 months after buying them. Form 1040ez The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. Form 1040ez The best evidence of FMV depends on actual transactions and not on some artificial estimate. Form 1040ez The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. Form 1040ez Terms of the purchase or sale. Form 1040ez   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. Form 1040ez These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. Form 1040ez Rate of increase or decrease in value. Form 1040ez   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. Form 1040ez For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. Form 1040ez Example. Form 1040ez Bill Brown bought a painting for $10,000. Form 1040ez Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. Form 1040ez The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. Form 1040ez Arm's-length offer. Form 1040ez   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. Form 1040ez To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. Form 1040ez Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. Form 1040ez Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. Form 1040ez The weight to be given to each sale depends on the following. Form 1040ez The degree of similarity between the property sold and the donated property. Form 1040ez The time of the sale—whether it was close to the valuation date. Form 1040ez The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. Form 1040ez The conditions of the market in which the sale was made—whether unusually inflated or deflated. Form 1040ez The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. Form 1040ez Example 1. Form 1040ez Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. Form 1040ez The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. Form 1040ez The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. Form 1040ez Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. Form 1040ez At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. Form 1040ez The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. Form 1040ez Example 2. Form 1040ez The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. Form 1040ez The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. Form 1040ez The principal and interest on the note would not be due for 12 years. Form 1040ez According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. Form 1040ez She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. Form 1040ez At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. Form 1040ez The difference between the two prices was solely at the discretion of the buyer. Form 1040ez The promoter was a willing seller for $10,000. Form 1040ez Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. Form 1040ez Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. Form 1040ez However, there must be a reasonable relationship between the replacement cost and the FMV. Form 1040ez The replacement cost is the amount it would cost to replace the donated item on the valuation date. Form 1040ez Often there is no relationship between the replacement cost and the FMV. Form 1040ez If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. Form 1040ez To determine the replacement cost of the donated property, find the “estimated replacement cost new. Form 1040ez ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. Form 1040ez You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. Form 1040ez ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. Form 1040ez For an expert's opinion to deserve much weight, the facts must support the opinion. Form 1040ez For additional information, see Appraisals, later. Form 1040ez Table 1. Form 1040ez Factors That Affect FMV IF the factor you are considering is. Form 1040ez . Form 1040ez . Form 1040ez THEN you should ask these questions. Form 1040ez . Form 1040ez . Form 1040ez     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. Form 1040ez Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. Form 1040ez When you rely on sales of comparable property, the sales must have been made in an open market. Form 1040ez If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. Form 1040ez For example, liquidation sale prices usually do not indicate the FMV. Form 1040ez Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. Form 1040ez Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. Form 1040ez However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. Form 1040ez The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. Form 1040ez Example. Form 1040ez You give a rare, old book to your former college. Form 1040ez The book is a third edition and is in poor condition because of a missing back cover. Form 1040ez You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. Form 1040ez Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. Form 1040ez Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. Form 1040ez Future Events You may not consider unexpected events happening after your donation of property in making the valuation. Form 1040ez You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. Form 1040ez Example. Form 1040ez You give farmland to a qualified charity. Form 1040ez The transfer provides that your mother will have the right to all income and full use of the property for her life. Form 1040ez Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. Form 1040ez You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. Form 1040ez Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. Form 1040ez Example. Form 1040ez You give all your rights in a successful patent to your favorite charity. Form 1040ez Your records show that before the valuation date there were three stages in the patent's history of earnings. Form 1040ez First, there was rapid growth in earnings when the invention was introduced. Form 1040ez Then, there was a period of high earnings when the invention was being exploited. Form 1040ez Finally, there was a decline in earnings when competing inventions were introduced. Form 1040ez The entire history of earnings may be relevant in estimating the future earnings. Form 1040ez However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. Form 1040ez The market conditions at those times do not represent the condition of the market at the valuation date. Form 1040ez What is most significant is the trend of decline in earnings up to the valuation date. Form 1040ez For more information about donations of patents, see Patents, later. Form 1040ez Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. Form 1040ez For information on appraisals, see Appraisals, later. Form 1040ez Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. Form 1040ez Such used property may have little or no market value because of its worn condition. Form 1040ez It may be out of style or no longer useful. Form 1040ez You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. Form 1040ez A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Form 1040ez See Deduction over $500 for certain clothing or household items, later. Form 1040ez If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. Form 1040ez Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. Form 1040ez Valuation of items of clothing does not lend itself to fixed formulas or methods. Form 1040ez The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. Form 1040ez You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. Form 1040ez An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. Form 1040ez See Deduction over $500 for certain clothing or household items, later. Form 1040ez For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. Form 1040ez Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. Form 1040ez The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. Form 1040ez If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. Form 1040ez The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. Form 1040ez Sentimental personal value has no effect on FMV. Form 1040ez But if the jewelry was owned by a famous person, its value might increase. Form 1040ez Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. Form 1040ez Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. Form 1040ez Art valued at $20,000 or more. Form 1040ez   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. Form 1040ez For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. Form 1040ez Art valued at $50,000 or more. Form 1040ez   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. Form 1040ez You must request the statement before filing the tax return that reports the donation. Form 1040ez Your request must include the following. Form 1040ez A copy of a qualified appraisal of the item. Form 1040ez See Qualified Appraisal, later. Form 1040ez A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. Form 1040ez Add $250 for each item in excess of three. Form 1040ez A completed Form 8283, Section B. Form 1040ez The location of the IRS territory that has examination responsibility for your return. Form 1040ez If your request lacks essential information, you will be notified and given 30 days to provide the missing information. Form 1040ez   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. Form 1040ez O. Form 1040ez Box 27720 McPherson Station Washington, DC 20038 Refunds. Form 1040ez   You can withdraw your request for a Statement of Value at any time before it is issued. Form 1040ez However, the IRS will not refund the user fee if you do. Form 1040ez   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. Form 1040ez Authenticity. Form 1040ez   The authenticity of the donated art must be determined by the appraiser. Form 1040ez Physical condition. Form 1040ez   Important items in the valuation of antiques and art are physical condition and extent of restoration. Form 1040ez These have a significant effect on the value and must be fully reported in an appraisal. Form 1040ez An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. Form 1040ez Art appraisers. Form 1040ez   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. Form 1040ez Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Form 1040ez Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. Form 1040ez They can report more recent comparable sales to support their opinion. Form 1040ez   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. Form 1040ez It lists museums both by state and by category. Form 1040ez   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. Form 1040ez The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. Form 1040ez You may be able to find a qualified appraiser on the Internet. Form 1040ez You may also contact associations of dealers for guidance. Form 1040ez Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. Form 1040ez Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. Form 1040ez Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. Form 1040ez Reference material. Form 1040ez   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. Form 1040ez When using one of these price guides, you must use the current edition at the date of contribution. Form 1040ez However, these sources are not always reliable indicators of FMV and should be supported by other evidence. Form 1040ez   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. Form 1040ez The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. Form 1040ez The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. Form 1040ez If you are donating a valuable collection, you should get an appraisal. Form 1040ez If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. Form 1040ez Stamp collections. Form 1040ez   Most libraries have catalogs or other books that report the publisher's estimate of values. Form 1040ez Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. Form 1040ez Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. Form 1040ez Coin collections. Form 1040ez   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. Form 1040ez Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. Form 1040ez Another important factor is the coin's condition. Form 1040ez For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. Form 1040ez   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. Form 1040ez Books. Form 1040ez   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. Form 1040ez This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. Form 1040ez Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. Form 1040ez Modest value of collection. Form 1040ez   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. Form 1040ez   A book that is very old, or very rare, is not necessarily valuable. Form 1040ez There are many books that are very old or rare, but that have little or no market value. Form 1040ez Condition of book. Form 1040ez   The condition of a book may have a great influence on its value. Form 1040ez Collectors are interested in items that are in fine, or at least good, condition. Form 1040ez When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. Form 1040ez Other factors. Form 1040ez   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). Form 1040ez Collectors usually want first editions of books. Form 1040ez However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. Form 1040ez Manuscripts, autographs, diaries, and similar items. Form 1040ez   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. Form 1040ez The writings of unknowns also may be of value if they are of unusual historical or literary importance. Form 1040ez Determining the value of such material is difficult. Form 1040ez For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. Form 1040ez The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. Form 1040ez Signatures. Form 1040ez   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. Form 1040ez But complete sets of the signatures of U. Form 1040ez S. Form 1040ez presidents are in demand. Form 1040ez Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. Form 1040ez Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. Form 1040ez Prices are reported for each make, model, and year. Form 1040ez These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Form 1040ez The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. Form 1040ez But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Form 1040ez These publications are sometimes available from public libraries or at a bank, credit union, or finance company. Form 1040ez You can also find pricing information about used cars on the Internet. Form 1040ez An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. Form 1040ez However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. Form 1040ez The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. Form 1040ez Example. Form 1040ez You donate a used car in poor condition to a local high school for use by students studying car repair. Form 1040ez A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Form 1040ez However, the guide shows the price for a private party sale of the car is only $750. Form 1040ez The FMV of the car is considered to be no more than $750. Form 1040ez Boats. Form 1040ez   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. Form 1040ez More information. Form 1040ez   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. Form 1040ez This rule applies if the claimed value of the donated vehicle is more than $500. Form 1040ez In certain cases, you can deduct the vehicle's FMV. Form 1040ez For details, see Publication 526. Form 1040ez Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. Form 1040ez For more information, see Publication 526. Form 1040ez Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. Form 1040ez However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. Form 1040ez Generally, this means your deduction is the lesser of the property's FMV or its basis. Form 1040ez For details, see Publication 526. Form 1040ez Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. Form 1040ez See Date of contribution, earlier, under What Is Fair Market Value (FMV). Form 1040ez Selling prices on valuation date. Form 1040ez   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. Form 1040ez For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. Form 1040ez You get the average price by adding $11 and $9 and dividing the sum by 2. Form 1040ez No sales on valuation date. Form 1040ez   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. Form 1040ez Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. Form 1040ez Example. Form 1040ez   On the day you gave stock to a qualified organization, there were no sales of the stock. Form 1040ez Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. Form 1040ez The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. Form 1040ez   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. Form 1040ez This applies if these prices are published in a generally available listing or publication of general circulation. Form 1040ez If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. Form 1040ez See also Unavailable prices or closely held corporation, later. Form 1040ez Bid and asked prices on valuation date. Form 1040ez   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. Form 1040ez Example. Form 1040ez Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. Form 1040ez The FMV is $15, the average price between the bid and asked prices. Form 1040ez No prices on valuation date. Form 1040ez   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. Form 1040ez Both dates must be within a reasonable period. Form 1040ez Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. Form 1040ez Example. Form 1040ez On the day you gave stock to a qualified organization, no prices were available. Form 1040ez Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. Form 1040ez The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. Form 1040ez   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. Form 1040ez Large blocks of stock. Form 1040ez   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. Form 1040ez On the other hand, market forces may exist that will afford higher prices for large blocks of stock. Form 1040ez Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. Form 1040ez Unavailable prices or closely held corporation. Form 1040ez   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. Form 1040ez For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. Form 1040ez For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Form 1040ez Other factors. Form 1040ez   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. Form 1040ez For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. Form 1040ez   You should keep complete financial and other information on which the valuation is based. Form 1040ez This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. Form 1040ez Restricted securities. Form 1040ez   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. Form 1040ez These restricted securities usually trade at a discount in relation to freely traded securities. Form 1040ez   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. Form 1040ez Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. Form 1040ez The appraiser must be thoroughly trained in the application of appraisal principles and theory. Form 1040ez In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. Form 1040ez The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. Form 1040ez The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. Form 1040ez In general, there are three main approaches to the valuation of real estate. Form 1040ez An appraisal may require the combined use of two or three methods rather than one method only. Form 1040ez 1. Form 1040ez Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. Form 1040ez The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. Form 1040ez If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. Form 1040ez , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. Form 1040ez For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. Form 1040ez The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. Form 1040ez Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. Form 1040ez Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. Form 1040ez 2. Form 1040ez Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. Form 1040ez The key elements are the determination of the income to be capitalized and the rate of capitalization. Form 1040ez 3. Form 1040ez Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. Form 1040ez Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. Form 1040ez Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. Form 1040ez Generally, this method serves to support the value determined from other methods. Form 1040ez When the replacement cost method is applied to improved realty, the land and improvements are valued separately. Form 1040ez The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. Form 1040ez This cost represents the total cost of labor and material, overhead, and profit. Form 1040ez After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. Form 1040ez Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. Form 1040ez The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. Form 1040ez The value of the goodwill of the business should also be taken into consideration. Form 1040ez You should keep complete financial and other information on which you base the valuation. Form 1040ez This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. Form 1040ez Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. Form 1040ez The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. Form 1040ez To determine present value, you must know the applicable interest rate and use actuarial tables. Form 1040ez Interest rate. Form 1040ez   The applicable interest rate varies. Form 1040ez It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. Form 1040ez The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. Form 1040ez You can call the IRS office at 1-800-829-1040 to obtain this rate. Form 1040ez Actuarial tables. Form 1040ez   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. Form 1040ez   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). Form 1040ez Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. Form 1040ez For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. Form 1040ez   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. Form 1040ez Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. Form 1040ez You can download Publications 1457 and 1458 from www. Form 1040ez irs. Form 1040ez gov. Form 1040ez In addition, they are available for purchase via the website of the U. Form 1040ez S. Form 1040ez Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. Form 1040ez O. Form 1040ez Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. Form 1040ez 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. Form 1040ez 664-4(e), and other transfers in Regulation 20. Form 1040ez 2031-7(d)(6). Form 1040ez Special factors. Form 1040ez   If you need a special factor for an actual transaction, you can request a letter ruling. Form 1040ez Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. Form 1040ez Also include copies of the relevant instruments. Form 1040ez IRS charges a user fee for providing special factors. Form 1040ez   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. Form 1040ez R. Form 1040ez B. Form 1040ez 1. Form 1040ez Revenue Procedure 2006-1 is available at www. Form 1040ez irs. Form 1040ez gov/irb/2006-01_IRB/ar06. Form 1040ez html. Form 1040ez   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. Form 1040ez Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. Form 1040ez But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. Form 1040ez If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. Form 1040ez Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. Form 1040ez However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. Form 1040ez Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. Form 1040ez To determine this value, you must know the FMV of the property on the date of the contribution. Form 1040ez Multiply this value by the appropriate factor. Form 1040ez Publications 1457 and 1458 contain these factors. Form 1040ez You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). Form 1040ez You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. Form 1040ez See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. Form 1040ez You can download Publication 1459 from www. Form 1040ez irs. Form 1040ez gov. Form 1040ez For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. Form 1040ez If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. Form 1040ez This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. Form 1040ez Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. Form 1040ez For more information, see section 1. Form 1040ez 170A-12 of the Income Tax Regulations. Form 1040ez Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. Form 1040ez It must extend over the entire term of your interest in the property. Form 1040ez For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. Form 1040ez You can claim a deduction for the contribution if you do not have any other interest in the property. Form 1040ez To figure the value of a contribution involving a partial interest, see Publication 1457. Form 1040ez If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. Form 1040ez Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. Form 1040ez Qualified organization. Form 1040ez   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. Form 1040ez , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. Form 1040ez The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. Form 1040ez Conservation purposes. Form 1040ez   Your contribution must be made only for one of the following conservation purposes. Form 1040ez Preserving land areas for outdoor recreation by, or for the education of, the general public. Form 1040ez Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. Form 1040ez Preserving open space, including farmland and forest land, if it yields a significant public benefit. Form 1040ez It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. Form 1040ez Preserving a historically important land area or a certified historic structure. Form 1040ez There must be some visual public access to the property. Form 1040ez Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. Form 1040ez Building in registered historic district. Form 1040ez   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. Form 1040ez The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. Form 1040ez You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. Form 1040ez If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. Form 1040ez   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. Form 1040ez See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. Form 1040ez Qualified real property interest. Form 1040ez   This is any of the following interests in real property. Form 1040ez Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). Form 1040ez A remainder interest. Form 1040ez A restriction (granted in perpetuity) on the use that may be made of the real property. Form 1040ez Valuation. Form 1040ez   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. Form 1040ez If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. Form 1040ez If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. Form 1040ez   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. Form 1040ez If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. Form 1040ez   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. Form 1040ez If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. Form 1040ez   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. Form 1040ez You should also consider any zoning, conservation, or historical preservation laws that would restrict development. Form 1040ez Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. Form 1040ez Example. Form 1040ez   You own 10 acres of farmland. Form 1040ez Similar land in the area has an FMV of $2,000 an acre. Form 1040ez However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. Form 1040ez Your county wants to preserve open space and prevent further development in your area. Form 1040ez   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. Form 1040ez The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. Form 1040ez More information. Form 1040ez   For more information about qualified conservation contributions, see Publication 526. Form 1040ez Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. Form 1040ez (There is one exception, described next, for certain clothing and household items. Form 1040ez ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. Form 1040ez There are exceptions. Form 1040ez See Deductions of More Than $5,000, later. Form 1040ez The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. Form 1040ez An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. Form 1040ez The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. Form 1040ez The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. Form 1040ez The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. Form 1040ez All facts associated with the donation must be considered. Form 1040ez Deduction over $500 for certain clothing or household items. Form 1040ez   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. Form 1040ez See Household Goods and Used Clothing, earlier. Form 1040ez Cost of appraisals. Form 1040ez   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. Form 1040ez However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. Form 1040ez Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. Form 1040ez There are exceptions, discussed later. Form 1040ez You should keep the appraiser's report with your written records. Form 1040ez Records are discussed in Publication 526. Form 1040ez The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. Form 1040ez For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. Form 1040ez You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. Form 1040ez Exceptions. Form 1040ez   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. Form 1040ez   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. Form 1040ez Publicly traded securities. Form 1040ez   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. Form 1040ez Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. Form 1040ez   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. Form 1040ez   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. Form 1040ez A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. Form 1040ez   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. Form 1040ez Bid and asked quotations are not taken into account. Form 1040ez   The computation period is weekly during October through December and monthly during January through September. Form 1040ez The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. Form 1040ez Nonpublicly traded stock. Form 1040ez   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. Form 1040ez However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. Form 1040ez Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. Form 1040ez This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. Form 1040ez If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. Form 1040ez Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. Form 1040ez You must also complete Form 8283, Section B, and attach it to your tax return. Form 1040ez See Deductions of More Than $5,000, earlier. Form 1040ez A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. Form 1040ez 170A-13(c)(3) and Notice 2006-96, 2006-46 I. Form 1040ez R. Form 1040ez B. Form 1040ez 902 (available at www. Form 1040ez irs. Form 1040ez gov/irb/2006-46_IRB/ar13. Form 1040ez html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). Form 1040ez You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. Form 1040ez If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. Form 1040ez Form 8283, Section B, must be attached to your tax return. Form 1040ez Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. Form 1040ez There are four exceptions. Form 1040ez If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. Form 1040ez See Paintings, Antiques, and Other Objects of Art, earlier. Form 1040ez If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. Form 1040ez See Deductions of More Than $500,000, earlier. Form 1040ez If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. Form 1040ez See Deduction over $500 for certain clothing or household items, earlier. Form 1040ez If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. Form 1040ez See Building in registered historic district, earlier. Form 1040ez Prohibited appraisal fee. Form 1040ez   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. Form 1040ez If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. Form 1040ez However, appraisals are not disqualified when an otherwise prohi
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Page Last Reviewed or Updated: 12-Feb-2014

The Form 1040ez

Form 1040ez Index A Actividades Pasivas , Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos Adopción, hijo de, Hijo adoptivo. Form 1040ez Anexos C, Empleado estatutario. Form 1040ez , Hoja de Trabajo B del Crédito por Ingreso del Trabajo. Form 1040ez C-EZ, Empleado estatutario. Form 1040ez , Hoja de Trabajo B del Crédito por Ingreso del Trabajo. Form 1040ez EIC, Se acerca el plazo para la presentación de la declaración y aún no tiene un número de Seguro Social. Form 1040ez , Anexo EIC SE, Miembro del clero. Form 1040ez , Hoja de Trabajo B del Crédito por Ingreso del Trabajo. Form 1040ez Anualidades, Cálculo del ingreso del trabajo. Form 1040ez Asignación básica para el sustento (BAS), Paga militar no tributable. Form 1040ez Asignación básica para la vivienda (BAH), Paga militar no tributable. Form 1040ez Asistente EITC , ¿Hay Ayuda Disponible en Internet? Ayuda tributaria (see Impuestos, ayuda con) B Beneficios a los veteranos, Ingresos que no se Consideran Ingresos del Trabajo Beneficios de bienestar social, Ingresos que no se Consideran Ingresos del Trabajo Beneficios de la jubilación ferroviaria, Ingresos que no se Consideran Ingresos del Trabajo Beneficios del Seguro Social, Ingresos que no se Consideran Ingresos del Trabajo Beneficios por desempleo, Ingresos que no se Consideran Ingresos del Trabajo Beneficios por Incapacidad, Beneficios por Incapacidad Beneficios sindicales por huelga, Beneficios sindicales por huelga. Form 1040ez Bienes gananciales, Bienes gananciales. Form 1040ez , Bienes gananciales. Form 1040ez C Casado que presenta una declaración conjunta, Requisito 1 —Límites del ingreso bruto ajustado (AGI, por sus siglas en inglés), Requisito de Declaración Conjunta Casado, hijo, Hijo casado. Form 1040ez Clero, Miembro del clero. Form 1040ez Cómo calcular usted mismo el EIC , Cómo Calcular Usted Mismo el EIC Compensación del Seguro Social, Ingresos que no se Consideran Ingresos del Trabajo Crianza, hijo de, Hijo de crianza. Form 1040ez D Denegación del EIC , Capítulo 5 —Denegación del EIC Divorciados, requisito especial para padres, Requisito especial para padres divorciados o separados (o que viven aparte). Form 1040ez E Ejemplos detallados, Capítulo 6 —Ejemplos Detallados El IRS le calculará el Crédito (EIC), El IRS le Calculará el Crédito (EIC) Empleado de una iglesia, Empleados de una iglesia. Form 1040ez Empleado estatutario, Empleado estatutario. Form 1040ez , Empleados estatutarios. Form 1040ez Escuela, Definición de escuela. Form 1040ez Estado civil Cabeza de familia, Requisito 3 —Su estado civil para efectos de la declaración no puede ser casado que presenta la declaración por separado Casado que presenta la declaración por separado, Requisito 3 —Su estado civil para efectos de la declaración no puede ser casado que presenta la declaración por separado Estados Unidos, Estados Unidos. Form 1040ez , Estados Unidos. Form 1040ez Estudiante, Definición de estudiante. Form 1040ez Extranjero no residente, Requisito 4 —Tiene que ser ciudadano de los Estados Unidos o extranjero residente durante todo el año F Formularios 1040, ¿Necesito esta Publicación?, Ingreso bruto ajustado (AGI). Form 1040ez , Si no tiene un número de Seguro Social (SSN). Form 1040ez , Requisito 4 —Tiene que ser ciudadano de los Estados Unidos o extranjero residente durante todo el año, Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos, Salarios, sueldos y propinas. Form 1040ez , Beneficios por Incapacidad 1040A, Ingreso bruto ajustado (AGI). Form 1040ez , Si no tiene un número de Seguro Social (SSN). Form 1040ez , Requisito 4 —Tiene que ser ciudadano de los Estados Unidos o extranjero residente durante todo el año, Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos, Salarios, sueldos y propinas. Form 1040ez , Beneficios por Incapacidad 1040EZ, Ingreso bruto ajustado (AGI). Form 1040ez , Si no tiene un número de Seguro Social (SSN). Form 1040ez , Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos, Salarios, sueldos y propinas. Form 1040ez 1040X, Si no tiene un número de Seguro Social (SSN). Form 1040ez , Se acerca el plazo para la presentación de la declaración y aún no tiene un número de Seguro Social. Form 1040ez 2555, Requisito 5 —No puede presentar el Formulario 2555 ni el Formulario 2555-EZ 2555–EZ, Requisito 5 —No puede presentar el Formulario 2555 ni el Formulario 2555-EZ 4029, Formulario 4361 ó 4029 Aprobado 4361, Formulario 4361 ó 4029 Aprobado 4797, ¿Necesito esta Publicación? 4868, Si no tiene un número de Seguro Social (SSN). Form 1040ez , Se acerca el plazo para la presentación de la declaración y aún no tiene un número de Seguro Social. Form 1040ez 4868(SP), Si no tiene un número de Seguro Social (SSN). Form 1040ez , Se acerca el plazo para la presentación de la declaración y aún no tiene un número de Seguro Social. Form 1040ez 8332, Requisito especial para padres divorciados o separados (o que viven aparte). Form 1040ez 8814, ¿Necesito esta Publicación?, Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos 8862(SP), Capítulo 5 —Denegación del EIC , Formulario 8862(SP) Fraude, Excepción 2. Form 1040ez , ¿Se le ha Prohibido Reclamar el Crédito por Ingreso del Trabajo por Cierto Número de Años? Fuerzas Armadas, Opción de incluir la paga no tributable por combate. Form 1040ez , Paga militar no tributable. Form 1040ez , Servicio activo prolongado. Form 1040ez H Hijo Hijo adoptivo, Hijo adoptivo. Form 1040ez Hijo casado, Hijo casado. Form 1040ez Hijo de crianza, Hijo de crianza. Form 1040ez Hijo secuestrado, Hijo secuestrado. Form 1040ez Nacimiento o fallecimiento de, Nacimiento o fallecimiento de un hijo. Form 1040ez Hijo calificado, ¿Hay que Tener un Hijo para Tener Derecho al Crédito por Ingreso del Trabajo (EIC)?, Requisito 1 —Límites del ingreso bruto ajustado (AGI, por sus siglas en inglés), Capítulo 2 —Requisitos que Tiene que Cumplir si Tiene un Hijo Calificado, Requisito 8 —Su hijo tiene que cumplir los requisitos de parentesco, edad, residencia y declaración conjunta Estados Unidos, Requisito de Residencia Hogar, Requisito de Residencia Requisito de Declaración Conjunta, Declaraciones conjuntas. Form 1040ez Requisito de Edad, Requisito de Edad Requisito de Parentesco, Requisito de Parentesco Requisito de Residencia, Requisito de Residencia Total y permanentemente incapacitado, Total y permanentemente incapacitado. Form 1040ez Hogar Albergues para personas sin hogar, Albergues para personas sin hogar. Form 1040ez Estados Unidos, Estados Unidos. Form 1040ez Militar, Personal militar destacado fuera de los Estados Unidos. Form 1040ez , Personal militar destacado fuera de los Estados Unidos. Form 1040ez Hoja de Trabajo 2, Hoja de Trabajo 2: Hoja de Trabajo para la Línea 4 de la Hoja de Trabajo 1 I Impuestos, ayuda con, Cómo Obtener Ayuda con los Impuestos Información TTY/TDD , Teléfono. Form 1040ez Ingreso del trabajo, Ingresos del Trabajo Empleado estatutario, Ingreso del Trabajo, Empleado estatutario. Form 1040ez Trabajo por cuenta propia, Ingreso del Trabajo Ingresos de dividendos, Ingresos que no se Consideran Ingresos del Trabajo Ingresos de inversiones, Qué Hay de Nuevo para el año 2013, Requisito 6 —Tiene que tener ingresos de inversiones de $3,300 o menos Ingresos netos del trabajo por cuenta propia, Ingresos netos del trabajo por cuenta propia. Form 1040ez , Ingresos netos del trabajo por cuenta propia de $400 o más. Form 1040ez Ingresos que no se Consideran Ingresos de Trabajo, Ingresos que no se Consideran Ingresos del Trabajo Intereses, Ingresos que no se Consideran Ingresos del Trabajo Internet, ayuda por Asistente EITC , ¿Hay Ayuda Disponible en Internet? M Miembro del clero, Miembro del clero. Form 1040ez Militar Fuera de los Estados Unidos, Personal militar destacado fuera de los Estados Unidos. Form 1040ez , Personal militar destacado fuera de los Estados Unidos. Form 1040ez Paga no tributable, Paga militar no tributable. Form 1040ez Paga no tributable por combate, Opción de incluir la paga no tributable por combate. Form 1040ez , Paga no tributable por combate. Form 1040ez Paga por combate, Opción de incluir la paga no tributable por combate. Form 1040ez , Paga militar no tributable. Form 1040ez Ministro, Vivienda de un ministro de una orden religiosa. Form 1040ez N Número de identificación del contribuyente en proceso de adopción (ATIN), Hijo casado. Form 1040ez Número de identificación del contribuyente individual (ITIN), Otro número de identificación del contribuyente. Form 1040ez , Hijo casado. Form 1040ez Número de Seguro Social (SSN), Requisito 2 —Tiene que tener un número de Seguro Social (SSN) válido, Hijo casado. Form 1040ez P Padres, divorciados o separados, Requisito especial para padres divorciados o separados (o que viven aparte). Form 1040ez Pagos de bienestar socia a cambio de actividades laborales, Pagos de bienestar social a cambio de actividades laborales. Form 1040ez Pareja doméstica, Pareja o sociedad doméstica en Nevada, Washington y California. Form 1040ez Pensión alimenticia, Ingresos que no se Consideran Ingresos del Trabajo Pensiones, Cálculo del ingreso del trabajo. Form 1040ez Personas que trabajan por cuenta propia, Hoja de Trabajo B del Crédito por Ingreso del Trabajo. Form 1040ez Propinas, sueldos y salarios, Salarios, sueldos y propinas. Form 1040ez Publicaciones (see Impuestos, ayuda con) R Recluso, Ingresos recibidos como recluso en una institución penal. Form 1040ez , Cálculo del ingreso del trabajo. Form 1040ez Recordatorios, Recordatorios Reglas del desempate, Reglas del desempate. Form 1040ez , Cómo aplicar el Requisito 9 a padres divorciados o separados (o que viven aparte). Form 1040ez Requisito de Declaración Conjunta (see Hijo calificado) Requisito de Edad (see Hijo calificado) Requisito de Parentesco (see Hijo calificado) Requisito de Residencia (see Hijo calificado) Requisito especial para padres divorciados o separados, Requisito especial para padres divorciados o separados (o que viven aparte). Form 1040ez S Salarios, sueldos y propinas, Salarios, sueldos y propinas. Form 1040ez Secuestro, hijo, Hijo secuestrado. Form 1040ez Separados, requisito especial para padres, Requisito especial para padres divorciados o separados (o que viven aparte). Form 1040ez Servicio activo prolongado, Servicio activo prolongado. Form 1040ez Servicio del Defensor del Contribuyente, El Servicio del Defensor del Contribuyente está aquí para ayudarlo a usted. Form 1040ez Servicios gratis de impuestos, Ayuda gratuita con la preparación de su declaración de impuestos. Form 1040ez Sin Hogar, albergues para personas, Albergues para personas sin hogar. Form 1040ez T Tabla del Crédito por Ingreso del Trabajo (EIC) , EIC Table Total y permanentemente incapacitado, Total y permanentemente incapacitado. Form 1040ez V Veteranos, beneficios, Ingresos que no se Consideran Ingresos del Trabajo Prev  Up     Home   More Online Publications