A donation appraisal is a written valuation report prepared by a qualified appraiser that states the fair market value of property you plan to give, or have given, to a charity. It is primarily needed when you claim a sizable deduction for noncash gifts such as artwork, antiques, collectibles, real estate, or large blocks of personal property. The appraiser inspects the property, researches relevant market data, and explains the reasoning that supports the value conclusion. For tax purposes, the appraisal must meet specific IRS standards, be prepared close in time to the donation, and include detailed descriptions, methods, and assumptions. The appraisal helps you correctly report your deduction and gives the IRS confidence that values are not overstated, which reduces the risk of disallowed deductions and penalties.
