Charitable Deduction Appraisals

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• Appraising Collectibles For A Tax Write-Off

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  If you haven’t managed to get any of the items from your attic onto “Antiques Roadshow” yet, you do have another option: Having a possession appraised.

  There could be several reasons to have it done. A person might want to take insurance out to cover the item. Or, maybe it’s simple curiosity about what it might worth. Another reason, however, is to take a deduction on taxes if the item is being donated to a charity.

  Shirley Baumann, a certified personal property appraiser, a registered Wisconsin auctioneer and the owner of Baumann Auction Services and Heirloom Appraisal & Estate Services, said that there is a procedure people should follow in such situations.

  “There are special rules for art, antiques and collectibles. When you want to take a deduction of $500 or more, you’re supposed to have an appraisal done,” she said.

  That appraisal, however, would only need to be produced in case of an audit. The IRS only requires that an appraisal be submitted proactively when the item’s value is $5,000 or more. (Any non-cash donation greater than $500 does require IRS form 8283 with the tax return.)

  If the deduction is $20,000 or more, that crosses another threshold with the IRS.

  “The appraisal and your request will to go to a committee in the arts and antiques world. The committee will look it over very closely to see if that’s accurate,” Baumann said.

  The appraisal must be done by a qualified professional to be valid.

  “It’s interesting,” Baumann said. “While there are no real laws about it, the Appraisal Foundation, which is authorized by Congress, says that an appraiser must have … education from a recognized organization, and experience as an appraiser, you must hold yourself out as an appraiser who gets regularly compensated for that work.”

  Baumann added that the report must be submitted according to the Uniform Standards of Professional Appraisal Practice, also called USPAP. She said that the best way for an appraiser to keep in compliance with USPAP is to take the 15-hour class offered by the Appraisal Foundation. Once that class is taken, there are continuing education requirements as well.

  As is the case for monetary contributions, too, the organization receiving the donated item must be have non-profit status granted by the IRS.

  Baumann said that in her experience, it is often a museum or library that is receiving the gift. She has also does valuations for people donating religious art to a place of worship, and even a home that has been demolished, with the recovered materials being donated to Habitat for Humanity.