Tangible Personal Property
Income Tax Deduction
A donor may deduct the fair market value of long-term capital gain property if the property is transferred to a public charity that can put the item to a use related to its purposes; 30% of AGI ceiling applies. Unrelated use will limit the deduction to cost basis, but a 50% ceiling applies. The same reduction applies if item is artwork transferred by the artist who created it. Gifts to 30% charities limited to cost basis.
Capital Gains Considerations
No gain is reportable when donors give "collectibles" or other tangible personal property, which is advantageous even for taxpayers who cannot "itemize" deductions.
Date Gift Is Effective
The date of the gift is the date of delivery of property to a charity or its agent, including the gift of a fractional interest. For subsequent gifts of fractional interests in the same asset, deductions will be based on the asset's value on the date of the original contribution.
Method of Transfer
A transfer is generally made by the delivery of the property. A deed of the gift or bill of sale is advisable.
Valuation of Gift Assets
An appraisal is generally required. Donors must send photos of the artworks to the IRS advisory panels that value contributions of art over $20,000. Donors can request a "Statement of Value" from the IRS for artwork valued at more than $50,000.
Substantiation Requirements
For a single item worth $250 to $500, a receipt from the charity is needed. For a single item worth $501 to $5,000, Section A, Form 8283 is also required. For a single item over $5,000 (or multiple "similar items" exceeding $5,000), Section B, Form 8283, is required as well, with a qualified appraisal.
Special Considerations
The sale of tangible personal property by a charity is by itself an unrelated use, even where the sale proceeds are used for the charity's programs. Gifts of future interests in tangible personal property are not deductible until any intervening interest ends.
A donor may deduct the fair market value of long-term capital gain property if the property is transferred to a public charity that can put the item to a use related to its purposes; 30% of AGI ceiling applies. Unrelated use will limit the deduction to cost basis, but a 50% ceiling applies. The same reduction applies if item is artwork transferred by the artist who created it. Gifts to 30% charities limited to cost basis.
Capital Gains Considerations
No gain is reportable when donors give "collectibles" or other tangible personal property, which is advantageous even for taxpayers who cannot "itemize" deductions.
Date Gift Is Effective
The date of the gift is the date of delivery of property to a charity or its agent, including the gift of a fractional interest. For subsequent gifts of fractional interests in the same asset, deductions will be based on the asset's value on the date of the original contribution.
Method of Transfer
A transfer is generally made by the delivery of the property. A deed of the gift or bill of sale is advisable.
Valuation of Gift Assets
An appraisal is generally required. Donors must send photos of the artworks to the IRS advisory panels that value contributions of art over $20,000. Donors can request a "Statement of Value" from the IRS for artwork valued at more than $50,000.
Substantiation Requirements
For a single item worth $250 to $500, a receipt from the charity is needed. For a single item worth $501 to $5,000, Section A, Form 8283 is also required. For a single item over $5,000 (or multiple "similar items" exceeding $5,000), Section B, Form 8283, is required as well, with a qualified appraisal.
Special Considerations
The sale of tangible personal property by a charity is by itself an unrelated use, even where the sale proceeds are used for the charity's programs. Gifts of future interests in tangible personal property are not deductible until any intervening interest ends.
