Donation Appraisals and Charitable Contribution Tax Deduction Appraisals
Do you require a “donation appraisal” or “charitable contribution tax deduction appraisal” for personal and or your business tax return? In 2007 the IRS made dramatic changes to the Tax Code which mandated that taxpayers provide appraisal reports for their donated items along with their 1040 tax return. According to the IRS, if the value of your non-cash donated item exceeds $500 dollars and is less than $5000 dollars, then you will also be required to file certain IRS tax forms, requiring the signature of a certified appraiser, along with your tax return.
If the value of your non-cash donated item exceeds $5000 dollars and up to a value of $25,000 dollars in value then you will be required by the IRS to obtain an appraisal report from a qualified wine appraiser. Strangely enough, while the law requires you to hire your choice of qualified spirits and wine appraisers, you are not required to submit your copy of the liquor appraisals or wine appraisals report to the IRS.
However, if the value of your non-cash donated item exceeds $25,000 dollars in value then you will required submit a copy of the qualified appraisal report with your federal IRS Form 1040 tax return. Please contact your tax professional or the Internal Revenue Service should you require additional information and assistance.