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Irs Extension

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Irs Extension

Irs extension Index A Accelerated death benefits, Accelerated Death Benefits Accounting periods Change in, standard deduction not allowed, Persons not eligible for the standard deduction. Irs extension Accrued leave payment Disability retirement and, Accrued leave payment. Irs extension Adjusted gross income (AGI), Adjustments to Income Adjustments to income, Adjustments to Income Age Standard deduction for age 65 or older, Higher standard deduction for age (65 or older). Irs extension Age 65, Qualified Individual American Association of Retired Persons (AARP), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Irs extension Annuities, Pensions and Annuities Assistance (see Tax help) B Base amount, social security benefits, Base Amount Benefits Accident or health, Other compensation. Irs extension Long-term care, Long-Term Care Insurance Contracts No-fault insurance, Other compensation. Irs extension Sickness and injury, Sickness and Injury Benefits Social security, Are Any of Your Benefits Taxable? Veterans', Veterans' benefits. Irs extension Bequests, Gifts and inheritances. Irs extension Blind persons Standard deduction for, Higher standard deduction for blindness. Irs extension C Child and dependent care credit, Child and Dependent Care Credit Children Standard deduction for, Standard Deduction for Dependents Chronically ill persons, Chronically ill individual. Irs extension Chronically ill, defined, Terminally or chronically ill defined. Irs extension Compensation For services, Compensation for Services Loss or disfigurement, Other compensation. Irs extension Contributions Foreign employment, Foreign employment contributions. Irs extension Pension or annuity, Cost. Irs extension Cost, pension or annuity, Cost. Irs extension Credit Child and dependent care, Child and Dependent Care Credit Earned income, Earned Income Credit (EIC) The elderly or the disabled, Credit for the Elderly or the Disabled Credit for the elderly or the disabled, Credit for the Elderly or the Disabled D Death benefit, accelerated, Accelerated Death Benefits Decedents, Dependents. Irs extension Standard deduction, Decedent's final return. Irs extension Deductions Generally, Deductions Insurance premiums, Medical Insurance Premiums Itemized, Itemized Deductions Meals and lodging, Meals and Lodging Medical and dental, Medical and Dental Expenses Standard, Standard Deduction Dependents, Dependents. Irs extension Standard deduction for, Standard Deduction for Dependents Disabilities, individuals with Ownership and use test, Exception to use test for individuals with a disability. Irs extension Disability Person with, Persons with disabilities. Irs extension Physician's statement, Physician's statement. Irs extension Total and permanent, Permanent and total disability. Irs extension Disability income, Disability Pensions, Other compensation. Irs extension , Disability income. Irs extension Distributions, retirement plan, Retirement Plan Distributions Drugs (see Medicines) Dual-status taxpayers Standard deduction, Persons not eligible for the standard deduction. Irs extension E Early distributions, tax, Tax on Early Distributions Earned income credit, Earned Income Credit (EIC) Elderly or disabled credit, Credit for the Elderly or the Disabled Elderly persons Standard deduction for age 65 or older, Higher standard deduction for age (65 or older). Irs extension Employment tax withholding, Reminders Employment taxes, Employment taxes. Irs extension Endowment proceeds, Endowment Contract Proceeds Estimated tax, Tax Withholding and Estimated Tax, Estimated Tax, Who Must Make Estimated Tax Payments Excess accumulation, tax on, Tax on Excess Accumulation Exclusion, gain on sale of home, Maximum Amount of Exclusion F Federal Employees Compensation Act (FECA) payments, Federal Employees' Compensation Act (FECA). Irs extension Filing requirements Decedents, Dependents. Irs extension General requirements, General Requirements Surviving spouse, Surviving spouse. Irs extension Final return for decedent Standard deduction, Decedent's final return. Irs extension First-time homebuyer credit Recapture, Repaying the first-time homebuyer credit because you sold your home. Irs extension Form, Credit for the Elderly or the Disabled, Physician's statement. Irs extension 1099-R, Form 1099-R. Irs extension , Form 1099-R. Irs extension 5329, Form 5329. Irs extension 8853, Accelerated Death Benefits Schedule R, Credit for the Elderly or the Disabled, Physician's statement. Irs extension W-4P, Withholding. Irs extension Free tax services, Free help with your tax return. Irs extension G Gain on sale of home (see Sale of home) General rule, pension or annuity, Pensions and Annuities Gifts, Gifts and inheritances. Irs extension H Help (see Tax help) Home care (see Nursing services) Home improvements, Home Improvements Home, sale of, Sale of Home Hospital services, Hospital Services Household help, Household Help I Income Adjustments, Adjustments to Income Disability, Disability Pensions, Disability income. Irs extension Gross, defined, Gross income. Irs extension Nontaxable, Taxable and Nontaxable Income Sale of home, Sale of Home Self-employment, Self-employed persons. Irs extension Taxable, Taxable and Nontaxable Income Individual retirement arrangement (IRA) Adjustments to income, Individual Retirement Arrangement (IRA) Contributions and Deductions Contributions, Contributions. Irs extension Deductible contribution, Deductible contribution. Irs extension Distributions, Individual Retirement Arrangements (IRAs) Inheritances, Gifts and inheritances. Irs extension Injury benefits, Sickness and Injury Benefits, Cost paid by you. Irs extension Insurance Accident and health, Other compensation. Irs extension , Medical Insurance Premiums Benefits, long-term care, Long-Term Care Insurance Contracts Benefits, no-fault insurance, Other compensation. Irs extension Life insurance proceeds, Life Insurance Proceeds Proceeds paid after death, Life Insurance Proceeds Proceeds paid before death, Accelerated Death Benefits Insurance premiums for retired public safety officers, Insurance Premiums for Retired Public Safety Officers Itemized deductions, Itemized Deductions Married filing separately One spouse has itemized, Persons not eligible for the standard deduction. Irs extension L Life insurance proceeds, Life Insurance Proceeds Long-term care, Long-Term Care Chronically ill individuals, Chronically ill individual. Irs extension Maintenance and personal care services, Maintenance and personal care services. Irs extension Qualified insurance contracts, Qualified long-term care insurance contracts. Irs extension Qualified services, Qualified long-term care services. Irs extension Long-term care insurance, Long-Term Care Insurance Contracts Loss or disfigurement compensation, Other compensation. Irs extension Lump-sum distributions, Lump-sum distributions. Irs extension Lump-sum election, social security, Lump-Sum Election M Maintenance and personal care services, Maintenance and personal care services. Irs extension Married filing separately Itemized deductions One spouse has itemized so other must as well, Persons not eligible for the standard deduction. Irs extension Married taxpayers Age 65 or older spouse Standard deduction, Spouse 65 or older or blind. Irs extension Blind spouse Standard deduction, Spouse 65 or older or blind. Irs extension Meals and lodging expenses, Meals and Lodging Medical expenses, Medical and Dental Expenses Medicare, Medicare Part A. Irs extension , Medicare Part B. Irs extension , Medicare Part D. Irs extension Benefits, Medicare. Irs extension Medicines, Medicines Imported, Imported medicines and drugs. Irs extension Military retirement pay, Military Retirement Pay Minimum distributions, Tax on Excess Accumulation Minimum wage, Substantial gainful activity. Irs extension Missing children, Reminders Mortgage assistance payments, Mortgage assistance payments. Irs extension N Nonperiodic distributions, Nonperiodic Distributions Nonqualified use, Period of nonqualified use. Irs extension Nonresident aliens Standard deduction, Persons not eligible for the standard deduction. Irs extension Nontaxable income, Payments from a state fund for victims of crime. Irs extension Accident or health insurance benefits, Other compensation. Irs extension Bequests, Gifts and inheritances. Irs extension Generally, Taxable and Nontaxable Income Gifts, Gifts and inheritances. Irs extension Inheritances, Gifts and inheritances. Irs extension Mortgage assistance payments, Mortgage assistance payments. Irs extension No-fault insurance benefits, Other compensation. Irs extension Nutrition program for elderly, Nutrition Program for the Elderly. Irs extension Public assistance payments, Welfare benefits. Irs extension Sickness and injury benefits, Sickness and Injury Benefits Veterans' benefits, Veterans' benefits. Irs extension Winter energy use, Payments to reduce cost of winter energy use. Irs extension Workers' compensation, Workers' Compensation Nursing home, Nursing home. Irs extension Nursing services, Nursing Services Chronically ill individuals, Chronically ill individual. Irs extension Nutrition program for elderly, Nutrition Program for the Elderly. Irs extension O Old-age, survivors, and disability insurance benefits (OASDI), Old-age, survivors, and disability insurance benefits (OASDI). Irs extension Other items, Other Items Overall limitation, Overall limitation. Irs extension P Payments, estimated tax, Estimated Tax Pensions, Pensions and Annuities Pensions, disability, Disability Pensions Photographs, missing children, Reminders Physician's statement, disability, Physician's statement. Irs extension Prepaid insurance premiums, Prepaid insurance premiums. Irs extension Preparer, paid, Reminders Preparing your return, Return preparation assistance. Irs extension Profit-sharing plan, Retirement and profit-sharing plans. Irs extension Public assistance payments, Welfare benefits. Irs extension Publications (see Tax help) Q Qualified retirement plan, Tax on Early Distributions R Railroad retirement benefits, Railroad Retirement Benefits, Social Security and Equivalent Railroad Retirement Benefits Repayments Social security benefits, Repayment of Benefits Reporting pension income, How to report. Irs extension Residence, sale of, Sale of Home Retirement plans, distributions, Retirement Plan Distributions Returns Decedent, Dependents. Irs extension Executors and administrators, Dependents. Irs extension Filing requirements, 2013 Filing Requirements Surviving spouse, Surviving spouse. Irs extension Reverse mortgages, Reverse Mortgages S Salaries (see Compensation) Sale of Home First-time homebuyer credit, Repaying the first-time homebuyer credit because you sold your home. Irs extension Surviving spouse, Reminders Sale of home, Sale of Home Self-employed, Self-employed persons. Irs extension Short tax year Change in annual accounting period, Persons not eligible for the standard deduction. Irs extension Sickness and injury benefits, Sickness and Injury Benefits Simplified method, Pensions and Annuities Social security benefits, Social Security and Equivalent Railroad Retirement Benefits Standard deduction, Standard Deduction Age 65 or older, Higher standard deduction for age (65 or older). Irs extension Blind persons, Higher standard deduction for blindness. Irs extension Dependents, Standard Deduction for Dependents Final return of decedent, Decedent's final return. Irs extension Married filing separately One spouse has itemized, Persons not eligible for the standard deduction. Irs extension Starting date, annuity, Cost. Irs extension State fund for victims of crime, Payments from a state fund for victims of crime. Irs extension Substantial gainful activity, Substantial gainful activity. Irs extension Surrender of Iife insurance, Surrender of policy for cash. Irs extension Surviving Spouse, Reminders Surviving spouse, Surviving spouse. Irs extension Surviving spouse, insurance, Surviving spouse. Irs extension Survivors of retirees, Survivors of retirees. Irs extension T Tax Early distributions, Tax on Early Distributions Estimated, Tax Withholding and Estimated Tax, Estimated Tax Excess accumulation, Tax on Excess Accumulation Tax counseling for the elderly (TCE), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Irs extension Tax help, How To Get Tax Help Tax option, 10-year, Lump-sum distributions. Irs extension Tax return preparers, Reminders Taxable income, Taxable and Nontaxable Income Taxation of benefits, Are Any of Your Benefits Taxable? Terminally ill, defined, Terminally or chronically ill defined. Irs extension Total and permanent disability, defined, Permanent and total disability. Irs extension Transportation expenses, Transportation TTY/TDD information, How To Get Tax Help U U. Irs extension S. Irs extension citizen or resident, U. Irs extension S. Irs extension citizen or resident alien. Irs extension Unemployment compensation, Unemployment compensation. Irs extension V Veterans' benefits, Veterans' benefits. Irs extension Viatical settlement, Accelerated Death Benefits Victims of crime, Payments from a state fund for victims of crime. Irs extension Volunteer income tax assistance (VITA), Volunteer Income Tax Assistance and Tax Counseling for the Elderly. Irs extension Volunteer work, Volunteer work. Irs extension W Wages (see Compensation) Winter energy use payments, Payments to reduce cost of winter energy use. Irs extension Withholding Employment tax, Reminders Pensions and annuities, Withholding. Irs extension Workers' compensation, Workers' Compensation Worksheets, social security, Which worksheet to use. Irs extension Prev  Up     Home   More Online Publications
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The Irs Extension

Irs extension Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. Irs extension Stock. Irs extension Options. Irs extension 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). Irs extension 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. Irs extension Fair market value. Irs extension   Fair market value (FMV) is the price that property would sell for on the open market. Irs extension 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. Irs extension If you put a restriction on the use of property you donate, the FMV must reflect that restriction. Irs extension Example 1. Irs extension 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. Irs extension Usually, such items are worth far less than what you paid for them. Irs extension Example 2. Irs extension 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. Irs extension Factors. Irs extension   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. Irs extension These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. Irs extension   These factors are discussed later. Irs extension Also, see Table 1 for a summary of questions to ask as you consider each factor. Irs extension Date of contribution. Irs extension   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. Irs extension Stock. Irs extension   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. Irs extension If the certificate is mailed and received through the regular mail, it is the date of mailing. Irs extension 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. Irs extension Options. Irs extension   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. Irs extension The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. Irs extension Example. Irs extension You grant an option to a local university, which is a qualified organization, to buy real property. Irs extension Under the option, the university could buy the property at any time during a 2-year period for $40,000. Irs extension The FMV of the property on the date the option is granted is $50,000. Irs extension In the following tax year, the university exercises the option. Irs extension The FMV of the property on the date the option is exercised is $55,000. Irs extension 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. Irs extension 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. Irs extension Usually it is not that simple. Irs extension Using such formulas, etc. Irs extension , seldom results in an acceptable determination of FMV. Irs extension There is no single formula that always applies when determining the value of property. Irs extension This is not to say that a valuation is only guesswork. Irs extension You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. Irs extension For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. Irs extension When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. Irs extension On the other hand, it may be an antique, the value of which could not be determined by using any formula. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension Example. Irs extension Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. Irs extension 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. Irs extension 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. Irs extension Tom gave the gems to a qualified charity 13 months after buying them. Irs extension The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. Irs extension The best evidence of FMV depends on actual transactions and not on some artificial estimate. Irs extension The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. Irs extension Terms of the purchase or sale. Irs extension   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. Irs extension These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. Irs extension Rate of increase or decrease in value. Irs extension   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. Irs extension 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. Irs extension Example. Irs extension Bill Brown bought a painting for $10,000. Irs extension Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. Irs extension 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. Irs extension Arm's-length offer. Irs extension   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. Irs extension To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. Irs extension 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. Irs extension Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. Irs extension The weight to be given to each sale depends on the following. Irs extension The degree of similarity between the property sold and the donated property. Irs extension The time of the sale—whether it was close to the valuation date. Irs extension The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. Irs extension The conditions of the market in which the sale was made—whether unusually inflated or deflated. Irs extension The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. Irs extension Example 1. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. Irs extension At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. Irs extension 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. Irs extension Example 2. Irs extension The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. Irs extension 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. Irs extension The principal and interest on the note would not be due for 12 years. Irs extension 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. Irs extension 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. Irs extension At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. Irs extension The difference between the two prices was solely at the discretion of the buyer. Irs extension The promoter was a willing seller for $10,000. Irs extension 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. Irs extension Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. Irs extension However, there must be a reasonable relationship between the replacement cost and the FMV. Irs extension The replacement cost is the amount it would cost to replace the donated item on the valuation date. Irs extension Often there is no relationship between the replacement cost and the FMV. Irs extension If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. Irs extension To determine the replacement cost of the donated property, find the “estimated replacement cost new. Irs extension ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. Irs extension 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. Irs extension ” 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. Irs extension For an expert's opinion to deserve much weight, the facts must support the opinion. Irs extension For additional information, see Appraisals, later. Irs extension Table 1. Irs extension Factors That Affect FMV IF the factor you are considering is. Irs extension . Irs extension . Irs extension THEN you should ask these questions. Irs extension . Irs extension . Irs extension     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. Irs extension 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. Irs extension When you rely on sales of comparable property, the sales must have been made in an open market. Irs extension 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. Irs extension For example, liquidation sale prices usually do not indicate the FMV. Irs extension 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. Irs extension Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. Irs extension However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. Irs extension 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. Irs extension Example. Irs extension You give a rare, old book to your former college. Irs extension The book is a third edition and is in poor condition because of a missing back cover. Irs extension 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. Irs extension Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. Irs extension Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. Irs extension Future Events You may not consider unexpected events happening after your donation of property in making the valuation. Irs extension 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. Irs extension Example. Irs extension You give farmland to a qualified charity. Irs extension The transfer provides that your mother will have the right to all income and full use of the property for her life. Irs extension 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. Irs extension You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. Irs extension 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. Irs extension Example. Irs extension You give all your rights in a successful patent to your favorite charity. Irs extension Your records show that before the valuation date there were three stages in the patent's history of earnings. Irs extension First, there was rapid growth in earnings when the invention was introduced. Irs extension Then, there was a period of high earnings when the invention was being exploited. Irs extension Finally, there was a decline in earnings when competing inventions were introduced. Irs extension The entire history of earnings may be relevant in estimating the future earnings. Irs extension However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. Irs extension The market conditions at those times do not represent the condition of the market at the valuation date. Irs extension What is most significant is the trend of decline in earnings up to the valuation date. Irs extension For more information about donations of patents, see Patents, later. Irs extension Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. Irs extension For information on appraisals, see Appraisals, later. Irs extension Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. Irs extension Such used property may have little or no market value because of its worn condition. Irs extension It may be out of style or no longer useful. Irs extension You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. Irs extension 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. Irs extension See Deduction over $500 for certain clothing or household items, later. Irs extension If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. Irs extension Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. Irs extension Valuation of items of clothing does not lend itself to fixed formulas or methods. Irs extension 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. Irs extension You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. Irs extension 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. Irs extension See Deduction over $500 for certain clothing or household items, later. Irs extension For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. Irs extension 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. Irs extension 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. Irs extension If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. Irs extension The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. Irs extension Sentimental personal value has no effect on FMV. Irs extension But if the jewelry was owned by a famous person, its value might increase. Irs extension 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. Irs extension Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. Irs extension Art valued at $20,000 or more. Irs extension   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. Irs extension 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. Irs extension Art valued at $50,000 or more. Irs extension   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. Irs extension You must request the statement before filing the tax return that reports the donation. Irs extension Your request must include the following. Irs extension A copy of a qualified appraisal of the item. Irs extension See Qualified Appraisal, later. Irs extension 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. Irs extension Add $250 for each item in excess of three. Irs extension A completed Form 8283, Section B. Irs extension The location of the IRS territory that has examination responsibility for your return. Irs extension If your request lacks essential information, you will be notified and given 30 days to provide the missing information. Irs extension   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. Irs extension O. Irs extension Box 27720 McPherson Station Washington, DC 20038 Refunds. Irs extension   You can withdraw your request for a Statement of Value at any time before it is issued. Irs extension However, the IRS will not refund the user fee if you do. Irs extension   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. Irs extension Authenticity. Irs extension   The authenticity of the donated art must be determined by the appraiser. Irs extension Physical condition. Irs extension   Important items in the valuation of antiques and art are physical condition and extent of restoration. Irs extension These have a significant effect on the value and must be fully reported in an appraisal. Irs extension An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. Irs extension Art appraisers. Irs extension   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. Irs extension Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Irs extension 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. Irs extension They can report more recent comparable sales to support their opinion. Irs extension   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. Irs extension It lists museums both by state and by category. Irs extension   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. Irs extension The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. Irs extension You may be able to find a qualified appraiser on the Internet. Irs extension You may also contact associations of dealers for guidance. Irs extension 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. Irs extension Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. Irs extension Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. Irs extension Reference material. Irs extension   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. Irs extension When using one of these price guides, you must use the current edition at the date of contribution. Irs extension However, these sources are not always reliable indicators of FMV and should be supported by other evidence. Irs extension   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. Irs extension The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. Irs extension The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. Irs extension If you are donating a valuable collection, you should get an appraisal. Irs extension 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. Irs extension Stamp collections. Irs extension   Most libraries have catalogs or other books that report the publisher's estimate of values. Irs extension Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. Irs extension Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. Irs extension Coin collections. Irs extension   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. Irs extension Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. Irs extension Another important factor is the coin's condition. Irs extension 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. Irs extension   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. Irs extension Books. Irs extension   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. Irs extension This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. Irs extension Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. Irs extension Modest value of collection. Irs extension   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. Irs extension   A book that is very old, or very rare, is not necessarily valuable. Irs extension There are many books that are very old or rare, but that have little or no market value. Irs extension Condition of book. Irs extension   The condition of a book may have a great influence on its value. Irs extension Collectors are interested in items that are in fine, or at least good, condition. Irs extension When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. Irs extension Other factors. Irs extension   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). Irs extension Collectors usually want first editions of books. Irs extension However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. Irs extension Manuscripts, autographs, diaries, and similar items. Irs extension   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. Irs extension The writings of unknowns also may be of value if they are of unusual historical or literary importance. Irs extension Determining the value of such material is difficult. Irs extension 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. Irs extension The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. Irs extension Signatures. Irs extension   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. Irs extension But complete sets of the signatures of U. Irs extension S. Irs extension presidents are in demand. Irs extension Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. Irs extension 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. Irs extension Prices are reported for each make, model, and year. Irs extension These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. Irs extension The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. Irs extension But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. Irs extension These publications are sometimes available from public libraries or at a bank, credit union, or finance company. Irs extension You can also find pricing information about used cars on the Internet. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension Example. Irs extension You donate a used car in poor condition to a local high school for use by students studying car repair. Irs extension A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. Irs extension However, the guide shows the price for a private party sale of the car is only $750. Irs extension The FMV of the car is considered to be no more than $750. Irs extension Boats. Irs extension   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. Irs extension More information. Irs extension   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. Irs extension This rule applies if the claimed value of the donated vehicle is more than $500. Irs extension In certain cases, you can deduct the vehicle's FMV. Irs extension For details, see Publication 526. Irs extension 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. Irs extension For more information, see Publication 526. Irs extension 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. Irs extension 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. Irs extension Generally, this means your deduction is the lesser of the property's FMV or its basis. Irs extension For details, see Publication 526. Irs extension Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. Irs extension See Date of contribution, earlier, under What Is Fair Market Value (FMV). Irs extension Selling prices on valuation date. Irs extension   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. Irs extension For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. Irs extension You get the average price by adding $11 and $9 and dividing the sum by 2. Irs extension No sales on valuation date. Irs extension   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. Irs extension Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. Irs extension Example. Irs extension   On the day you gave stock to a qualified organization, there were no sales of the stock. Irs extension 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. Irs extension 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. Irs extension   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. Irs extension This applies if these prices are published in a generally available listing or publication of general circulation. Irs extension 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. Irs extension See also Unavailable prices or closely held corporation, later. Irs extension Bid and asked prices on valuation date. Irs extension   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. Irs extension Example. Irs extension 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. Irs extension The FMV is $15, the average price between the bid and asked prices. Irs extension No prices on valuation date. Irs extension   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. Irs extension Both dates must be within a reasonable period. Irs extension 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. Irs extension Example. Irs extension On the day you gave stock to a qualified organization, no prices were available. Irs extension Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. Irs extension 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. Irs extension   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. Irs extension Large blocks of stock. Irs extension   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. Irs extension On the other hand, market forces may exist that will afford higher prices for large blocks of stock. Irs extension 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. Irs extension Unavailable prices or closely held corporation. Irs extension   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. Irs extension For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. Irs extension For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Irs extension Other factors. Irs extension   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. Irs extension For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. Irs extension   You should keep complete financial and other information on which the valuation is based. Irs extension 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. Irs extension Restricted securities. Irs extension   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. Irs extension These restricted securities usually trade at a discount in relation to freely traded securities. Irs extension   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. Irs extension Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. Irs extension The appraiser must be thoroughly trained in the application of appraisal principles and theory. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension In general, there are three main approaches to the valuation of real estate. Irs extension An appraisal may require the combined use of two or three methods rather than one method only. Irs extension 1. Irs extension Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. Irs extension 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. Irs extension 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. Irs extension , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. Irs extension 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. Irs extension The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. Irs extension 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. Irs extension 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. Irs extension 2. Irs extension 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. Irs extension The key elements are the determination of the income to be capitalized and the rate of capitalization. Irs extension 3. Irs extension Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. Irs extension 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. Irs extension Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. Irs extension Generally, this method serves to support the value determined from other methods. Irs extension When the replacement cost method is applied to improved realty, the land and improvements are valued separately. Irs extension 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. Irs extension This cost represents the total cost of labor and material, overhead, and profit. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension The value of the goodwill of the business should also be taken into consideration. Irs extension You should keep complete financial and other information on which you base the valuation. Irs extension 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. Irs extension 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. Irs extension The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. Irs extension To determine present value, you must know the applicable interest rate and use actuarial tables. Irs extension Interest rate. Irs extension   The applicable interest rate varies. Irs extension It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. Irs extension The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. Irs extension You can call the IRS office at 1-800-829-1040 to obtain this rate. Irs extension Actuarial tables. Irs extension   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. Irs extension   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). Irs extension 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. Irs extension 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. Irs extension   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. Irs extension Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. Irs extension You can download Publications 1457 and 1458 from www. Irs extension irs. Irs extension gov. Irs extension In addition, they are available for purchase via the website of the U. Irs extension S. Irs extension Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. Irs extension O. Irs extension 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. Irs extension 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. Irs extension 664-4(e), and other transfers in Regulation 20. Irs extension 2031-7(d)(6). Irs extension Special factors. Irs extension   If you need a special factor for an actual transaction, you can request a letter ruling. Irs extension Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. Irs extension Also include copies of the relevant instruments. Irs extension IRS charges a user fee for providing special factors. Irs extension   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. Irs extension R. Irs extension B. Irs extension 1. Irs extension Revenue Procedure 2006-1 is available at www. Irs extension irs. Irs extension gov/irb/2006-01_IRB/ar06. Irs extension html. Irs extension   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. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension To determine this value, you must know the FMV of the property on the date of the contribution. Irs extension Multiply this value by the appropriate factor. Irs extension Publications 1457 and 1458 contain these factors. Irs extension You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). Irs extension You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. Irs extension See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. Irs extension You can download Publication 1459 from www. Irs extension irs. Irs extension gov. Irs extension 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. Irs extension 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. Irs extension This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. Irs extension Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. Irs extension For more information, see section 1. Irs extension 170A-12 of the Income Tax Regulations. Irs extension 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. Irs extension It must extend over the entire term of your interest in the property. Irs extension 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. Irs extension You can claim a deduction for the contribution if you do not have any other interest in the property. Irs extension To figure the value of a contribution involving a partial interest, see Publication 1457. Irs extension 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. Irs extension 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. Irs extension Qualified organization. Irs extension   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. Irs extension , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. Irs extension The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. Irs extension Conservation purposes. Irs extension   Your contribution must be made only for one of the following conservation purposes. Irs extension Preserving land areas for outdoor recreation by, or for the education of, the general public. Irs extension Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. Irs extension Preserving open space, including farmland and forest land, if it yields a significant public benefit. Irs extension It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. Irs extension Preserving a historically important land area or a certified historic structure. Irs extension There must be some visual public access to the property. Irs extension 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. Irs extension Building in registered historic district. Irs extension   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. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension   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. Irs extension See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. Irs extension Qualified real property interest. Irs extension   This is any of the following interests in real property. Irs extension 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). Irs extension A remainder interest. Irs extension A restriction (granted in perpetuity) on the use that may be made of the real property. Irs extension Valuation. Irs extension   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. Irs extension If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. Irs extension If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. Irs extension   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. Irs extension If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. Irs extension   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. Irs extension 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. Irs extension   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. Irs extension You should also consider any zoning, conservation, or historical preservation laws that would restrict development. Irs extension Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. Irs extension Example. Irs extension   You own 10 acres of farmland. Irs extension Similar land in the area has an FMV of $2,000 an acre. Irs extension However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. Irs extension Your county wants to preserve open space and prevent further development in your area. Irs extension   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. Irs extension 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. Irs extension More information. Irs extension   For more information about qualified conservation contributions, see Publication 526. Irs extension Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. Irs extension (There is one exception, described next, for certain clothing and household items. Irs extension ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. Irs extension There are exceptions. Irs extension See Deductions of More Than $5,000, later. Irs extension 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. Irs extension An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. Irs extension 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. Irs extension The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. Irs extension The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. Irs extension All facts associated with the donation must be considered. Irs extension Deduction over $500 for certain clothing or household items. Irs extension   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. Irs extension See Household Goods and Used Clothing, earlier. Irs extension Cost of appraisals. Irs extension   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. Irs extension 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. Irs extension 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. Irs extension There are exceptions, discussed later. Irs extension You should keep the appraiser's report with your written records. Irs extension Records are discussed in Publication 526. Irs extension 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. Irs extension 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. Irs extension 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. Irs extension Exceptions. Irs extension   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. Irs extension   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. Irs extension Publicly traded securities. Irs extension   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. Irs extension Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. Irs extension   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. Irs extension   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. Irs extension 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. Irs extension   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. Irs extension Bid and asked quotations are not taken into account. Irs extension   The computation period is weekly during October through December and monthly during January through September. Irs extension 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. Irs extension Nonpublicly traded stock. Irs extension   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. Irs extension However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. Irs extension 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. Irs extension This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. Irs extension 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. Irs extension 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. Irs extension You must also complete Form 8283, Section B, and attach it to your tax return. Irs extension See Deductions of More Than $5,000, earlier. Irs extension 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. Irs extension 170A-13(c)(3) and Notice 2006-96, 2006-46 I. Irs extension R. Irs extension B. Irs extension 902 (available at www. Irs extension irs. Irs extension gov/irb/2006-46_IRB/ar13. Irs extension 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). Irs extension 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. Irs extension 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. Irs extension Form 8283, Section B, must be attached to your tax return. Irs extension 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. Irs extension There are four exceptions. Irs extension If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. Irs extension See Paintings, Antiques, and Other Objects of Art, earlier. Irs extension If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. Irs extension See Deductions of More Than $500,000, earlier. Irs extension 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. Irs extension See Deduction over $500 for certain clothing or household items, earlier. Irs extension 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. Irs extension See Building in registered historic district, earlier. Irs extension Prohibited appraisal fee. Irs extension   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. Irs extension 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. Irs extension However, appraisals are not disqualified when an otherwise prohi