Charitable Donation

Type of Value: Fair Market Value

Use Case: Non-cash charitable donations of artworks valued over $5,000 require a qualified Appraisal Report for income tax purposes. Donors receive a current Fair Market Value tax deduction. An accompanying IRS 8283 form must be signed and acknowledged by both the Qualified Appraiser who issued the report and the receiving institution. The donee must acknowledge they comply with the use rule – the use of the donated property aligns with the mission of the 501c3. If the artwork is deaccessioned by the donee within three years of acceptance of the donation an IRS 8282 must be filed and the donor loses tax deduction benefits.

Recommendations: An Appraisal Report for purpose of non-cash charitable donation may be issued up to 60 days ahead of the Effective Date of the report, which is recorded as the official date of transfer of property. The ratification date may be either a fully executed Deed of Gift, or physical transfer to the donee. The report may also be issued after the date of transfer of property, and up to anytime ahead of the donor’s tax filing deadline.

Notes: The IRS heavily regulates appraisals for purposes of income tax deduction. It is crucial to comply with all standards as reports are often flagged and further reviewed by the IRS Art Advisory Panel.

Museum Exchange

Appraisal Bureau is proud to be the valuations partner of Museum Exchange – the first online platform to facilitate art donations between collectors and institutions. As pioneers of a new approach to philanthropy, Museum Exchange offers an invaluable tool in collection management for private collectors and institutions alike.