Publication 561

Publication 561

A form published by the IRS explaining how to determine the value of a property that has been given for free for tax purposes.
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For further assistance, taxpayers should review IRS Publication 561, Determining the Value of Donated Property.
Stocks traded on a stock exchange are valued at the average between the highest and lowest selling prices (not the closing price) on the contribution date (IRS Publication 561).
IRS Publication 561, Determining the Value of Donated Property, lists 11 points of information that each appraisal must contain.
Publication 561 offers instructions about calculating gifts of in-kind contributions or noncash donations and Publication 8283, substantiates more valuable in-kind contributions.
IRS Publication 561, "Determining the Value of Donated Property," includes a section specifically devoted to donations of cars, boats, and aircraft.
She recommends they familiarize themselves with "IRS Publication 526, Charitable Contributions;" "Publication 561, Determining the Value of Donated Property" and "Publication 4303, A Donor's Guide to Car Donations." All these publications are available at www.irs.gov.
This begs the question: what is "fair market value?" Under IRS regulations, that value is "the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of relevant facts." (1) (A slightly different formulation applies if the donated property was held as inventory.) IRS Publication 561, entitled "Determining the Value of Donated Property" (available at www.irs.gov), indicates that "[t]he cost of the property to you ...
Charities such as Goodwill (www.goodwill.org/page/guest/about) tell contributors to contact a local Goodwill store for information, to compare donations with similar items in the stores, or to check IRS Publication 561. The Salvation Army has estimated values for donated goods under a "donate" link on its website (www1.salvationarmy.org/ihq/www_sa.nsf).
These claims seem to be particularly false when the vehicles are accepted "running or not." Taxpayers should refer to the IRS Publication 561,
For more information, see IRS Publication 561: Determining the Value of Donated Property.
[See also IRC section 170(e)(1) and (e)(3) and Treasury Regulations section 1.170A-4(a) and 1.170A-4A(c) for possible reductions in value for certain property.] The general definition for fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or sell and both having reasonable knowledge of the relevant facts [Treasury Regulations section 1.170A-1(c)(2); see also IRS Publication 561, Determining the Value of Donated Property].
IRS Publication 561 also provides guidelines for choosing an appraiser.