(by Dave Maloney) This is Post 3 of 3. It, along with two additional posts, will address when qualified appraisals are required, when they must be attached to the taxpayer’s return, and related issues. See Post 1 of 3. See Post 2 of 3.
Let’s review IRS requirements regarding non-cash charitable donations at various value points, and associated appraisal-related issues.
(by David Maloney Sept. 30, 2011) A taxpayer is generally permitted a deduction for noncash charitable contributions subject to certain limitations depending on the type of taxpayer, the nature of the property contributed, and the type of donee organization. When the deduction is permitted, taxpayers are required to obtain a qualified appraisal from a qualified appraiser for donated property for which a deduction of more than $5,000 is claimed.
Since tax deductions reduce the amount of tax collected by the federal government, Congress has tightened the rules governing appraisals in recent years in quest of discouraging valuation abuse, i.e., overstating the value of the contributed property. To accomplish this, relevant statutes were introduced embedded within the American Jobs Creation Act of 2004 (Jobs Act) and the Pension Protection Act of 2006 (PPA).
Continue reading “Definitions of “Qualified Appraiser” and “Qualified Appraisal” Continue to Evolve”
(by William Novotny Sept. 2008) The Los Angeles Chapter of the ASA recently sponsored an IRS symposium entitled Practicing Before the IRS – A Guide for Personal Property Appraisers at the Atrium Hotel in Irvine, CA.
The symposium was well-attended and featured four key IRS speakers and Joy Berus, an attorney specializing in art law. From the IRS were Brenda Woolbert, CPA, CVA (Team Manager for the IRS Engineers and Appraisers office in Laguna Niguel, CA); Michael Zarefsky, Esq., CPA, IRS Attorney – Advisor; Susan Kassell, Esq. (Senior Counsel in the IRS Office of the Associate Chief Counsel, Income Tax & Accounting, Washington, DC) and Karen Carolan (Chief, Art Appraisal Services, Chair, Commissioner’s Art Advisory Panel Department of the Treasury, IRS, Washington, DC). Topics included the appraiser’s responsibilities, the requirements for estate and charitable contribution appraisals, IRS proposed changes and appraiser qualifications.
Though familiar with the complexity of IRS regulations, participants were surprised to learn that there are 243 sections of the IRS Code regarding the use of fair market value. There are over 15 million tax returns filed annually in which taxpayers have valuation issues. As might be expected, abuses and disputes regarding valuations occur.
Continue reading “IRS Appraisal Symposium: FMV Requires Use of “Most Common” Market”