Tag: qualified appraisal

$5000 and “Formal Appraisal” vs. “Qualified Appraisal”

Posted on by Dave Maloney

$5000 and “Formal Appraisal” vs. “Qualified Appraisal”

(by Dave Maloney) This is Post 2 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 3 of 3.

Question: “I would like to know when the IRS requires a formal appraisal for donated items. I have done several charitable donations and a donation that is more than $5000 need an appraisal. Is the cut off limit still $5000.00 or has it gone up or down?”

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Definitions of “Qualified Appraiser” and “Qualified Appraisal” Continue to Evolve

Posted on by Dave Maloney

Definitions of “Qualified Appraiser” and “Qualified Appraisal” Continue to Evolve

(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).

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