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FAQ's Continued
What
is a "Qualified Appraisal"?
A
"qualified appraisal" is one that contains the following information:
a. A detailed description of the property to be donated;
b. The physical condition of the property and attachments;
c. The date of the expected contribution;
d. Terms of any agreement or understanding by or on behalf of the donor
that relates to use, sales or other requirements of the donated property;
e. The name, address, and tax identification number of the appraiser and if
the appraiser is operating through a business, the name, address and
tax identification number of the business that employs or contracts
the appraiser;
f. The qualifications of the appraiser who performs the appraisal;
g. A statement that the appraisal was prepared for income tax purposes;
h. The date the appraiser established the property's value;
i. The value as of the date of contribution;
j. The valuation method employed by the appraiser to establish fair
market value (i.e.. comparable sales, market data, replacement cost less
depreciation);
k.
The specific basis for valuation used.
Who is
a "Qualified Appraiser"?
A
qualified appraiser is an individual who declares on the appraisal summary that
he or she:
Performs
appraisals on a regular basis and holds themselves out to the public as an
appraiser;
Because of
his/her qualifications as described in the appraisal, is qualified to make
appraisals on the type (s)) of properties being valued;
Is aware that
intentional false overstatement of the value of real estate may subject him/her
to penalties for such understatements;
Is
not an excluded individual, described as:
Is not the donor of the property or taxpayer claiming the deduction;
Is not the donee of the property;
Is not a party to the transaction; that is the appraiser does not hold an
interest
in the property unless the property is donated within two months of acquisition;
Is not related to the donor by blood or marriage;
Is not an appraiser who regularly appraises property for the donor, donee or
persons involved in the sale, exchange or transfer of the property.
Am I
Allowed More Than One Appraisal?
You
can have the property appraised by more than one appraiser and you don't need to
use each to establish a deduction amount. But, if you choose one the IRS may
ask if more than one appraisal was obtained and ask for copies.
What if the IRS Questions the Value in the Appraisal?
The
IRS may accept your determination of the value of the donated property or
establish its own value of the property based on the information provided by the
taxpayer. If the IRS seeks to establish its own determination of value they
may:
Refer
the determination of a donated property's value to an IRS appraiser;
Hire an
independent appraiser to perform an appraisal based on their knowledge of the
appraiser's
knowledge and qualifications;
Contact
the taxpayer for more information.
Generally,
the IRS does not give approval of a property's value prior to the submission of
the tax return. As well, the IRS does not give advance rulings with regard to
the approval or disapproval of qualified appraisals.
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