Publication 561 (Rev. April 2007) P561

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Publication 561
Department
of the
Treasury
Internal
Revenue
Service

(Rev. April 2007)

Contents

Cat. No. 15109Q

Introduction . . . . . . . . . . . . . . . . . . . . .

1

What Is Fair Market Value (FMV)? . . . . .
Determining Fair Market Value . . . . . .
Problems in Determining Fair
Market Value . . . . . . . . . . . . . . .

2
2

Determining
the Value of
Donated
Property

Valuation of Various Kinds of
Property . . . . . . . . . . . . . . . .
Household Goods . . . . . . . . . .
Used Clothing . . . . . . . . . . . . .
Jewelry and Gems . . . . . . . . . .
Paintings, Antiques, and Other
Objects of Art . . . . . . . . . .
Collections . . . . . . . . . . . . . . .
Cars, Boats, and Aircraft . . . . . .
Inventory . . . . . . . . . . . . . . . .
Patents . . . . . . . . . . . . . . . . .
Stocks and Bonds . . . . . . . . . .
Real Estate . . . . . . . . . . . . . . .
Interest in a Business . . . . . . . .
Annuities, Interests for Life or
Terms of Years, Remainders,
and Reversions . . . . . . . . .
Certain Life Insurance and
Annuity Contracts . . . . . . . .
Partial Interest in Property Not
in Trust . . . . . . . . . . . . . . .
Appraisals . . . . . . . . . . . . . . . . . .
Deductions of More Than $5,000
Deductions of More Than
$500,000 . . . . . . . . . . . . .
Qualified Appraisal . . . . . . . . . .
Form 8283 . . . . . . . . . . . . . . .
Internal Revenue Service Review
of Appraisals . . . . . . . . . . .

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Penalty . . . . . . . . . . . . . . . . . . . . . . . . 11
How To Get Tax Help . . . . . . . . . . . . . . 12
Index . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Introduction
This publication is designed to help donors and
appraisers determine the value of property
(other than cash) that is given to qualified organizations. It also explains what kind of information you must have to support the charitable
contribution deduction you claim on your return.
This publication does not discuss how to
figure the amount of your deduction for charitable contributions or written records and substantiation required. See Publication 526, Charitable
Contributions, for this information.
Comments and suggestions. We welcome
your comments about this publication and your
suggestions for future editions.
You can write to us at the following address:

Get forms and other information
faster and easier by:
Internet • www.irs.gov

Internal Revenue Service
Individual Forms and Publications Branch
SE:W:CAR:MP:T:I
1111 Constitution Ave. NW, IR-6406
Washington, DC 20224

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We respond to many letters by telephone.
Therefore, it would be helpful if you would include your daytime phone number, including the
area code, in your correspondence.
You can email us at *taxforms@irs.gov. (The
asterisk must be included in the address.)
Please put “Publications Comment” on the subject line. Although we cannot respond individually to each email, we do appreciate your
feedback and will consider your comments as
we revise our tax products.
Ordering forms and publications. Visit
www.irs.gov/formspubs to download forms and
publications, call 1-800-829-3676, or write to the
address below and receive a response within 10
business days after your request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702 – 8903
Tax questions. If you have a tax question,
visit www.irs.gov or call 1-800-829-1040. We
cannot answer tax questions sent to either of the
above addresses.

Useful Items
You may want to see:
Publication
❏ 526

Charitable Contributions

Form (and Instructions)
❏ 8282 Donee Information Return
❏ 8283 Noncash Charitable Contributions
❏ 8283-V Payment Voucher for Filing Fee
Under Section 170(f)(13)
See How To Get Tax Help, near the end of
this publication, for information about getting
these publications and forms.

What Is Fair
Market Value (FMV)?
To figure how much you may deduct for property
that you contribute, you must first determine its
fair market value on the date of the contribution.
Fair market value. Fair market value (FMV) is
the price that property would sell for on the open
market. It is the price that would be agreed on
between a willing buyer and a willing seller, with
neither being required to act, and both having
reasonable knowledge of the relevant facts. If
you put a restriction on the use of property you
donate, the FMV must reflect that restriction.
Example 1. If you give used clothing to the
Salvation Army, the FMV would be the price that
typical buyers actually pay for clothing of this
age, condition, style, and use. Usually, such
items are worth far less than what you paid for
them.
Example 2. If you donate land and restrict
its use to agricultural purposes, you must value
the land at its value for agricultural purposes,
even though it would have a higher FMV if it
were not restricted.
Page 2

Factors. In making and supporting the valuation of property, all factors affecting value are
relevant and must be considered. These include:

•
•
•
•

The cost or selling price of the item,
Sales of comparable properties,
Replacement cost, and
Opinions of experts.

These factors are discussed later. Also, see
Table 1 for a summary of questions to ask as
you consider each factor.
Date of contribution. Ordinarily, the date of a
contribution is the date that the transfer of the
property takes place.
Stock. If you deliver, without any conditions,
a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of
delivery. If the certificate is mailed and received
through the regular mail, it is the date of mailing.
If you deliver the certificate to a bank or broker
acting as your agent or to the issuing corporation
or its agent, for transfer into the name of the
organization, the date of the contribution is the
date the stock is transferred on the books of the
corporation.
Options. If you grant an option to a qualified
organization to buy real property, you have not
made a charitable contribution until the organization exercises the option. The amount of the
contribution is the FMV of the property on the
date the option is exercised minus the exercise
price.
Example. You grant an option to a local
university, which is a qualified organization, to
buy real property. Under the option, the university could buy the property at any time during a
2-year period for $40,000. The FMV of the property on the date the option is granted is $50,000.
In the following tax year, the university exercises the option. The FMV of the property on the
date the option is exercised is $55,000. Therefore, you have made a charitable contribution of
$15,000 ($55,000, the FMV, minus $40,000, the
exercise price) in the tax year the option is exercised.

Determining
Fair Market Value
Determining the value of donated property
would be a simple matter if you could rely only
on fixed formulas, rules, or methods. Usually it is
not that simple. Using such formulas, etc., seldom results in an acceptable determination of
FMV. There is no single formula that always
applies when determining the value of property.
This is not to say that a valuation is only
guesswork. You must consider all the facts and
circumstances connected with the property,
such as its desirability, use, and scarcity.
For example, donated furniture should not be
evaluated at some fixed rate such as 15% of the
cost of new replacement furniture. When the
furniture is contributed, it may be out of style or
in poor condition, therefore having little or no
market value. On the other hand, it may be an
antique, the value of which could not be determined by using any formula.

Cost or Selling Price of
the Donated Property
The cost of the property to you or the actual
selling price received by the qualified organization may be the best indication of its FMV. However, because conditions in the market change,
the cost or selling price of property may have
less weight if the property was not bought or sold
reasonably close to the date of contribution.
The cost or selling price is a good indication
of the property’s value if:

• The purchase or sale took place close to
the valuation date in an open market,

• The purchase or sale was at
“arm’s-length,”

• The buyer and seller knew all relevant
facts,

• The buyer and seller did not have to act,
and

• The market did not change between the
date of purchase or sale and the valuation
date.
Example. Tom Morgan, who is not a dealer
in gems, bought an assortment of gems for
$5,000 from a promoter. The promoter claimed
that the price was “wholesale” even though he
and other dealers made similar sales at similar
prices to other persons who were not dealers.
The promoter said that if Tom kept the gems for
more than 1 year and then gave them to charity,
Tom could claim a charitable deduction of
$15,000, which, according to the promoter,
would be the value of the gems at the time of
contribution. Tom gave the gems to a qualified
charity 13 months after buying them.
The selling price for these gems had not
changed from the date of purchase to the date
he donated them to charity. The best evidence
of FMV depends on actual transactions and not
on some artificial estimate. The $5,000 charged
Tom and others is, therefore, the best evidence
of the maximum FMV of the gems.
Terms of the purchase or sale. The terms of
the purchase or sale should be considered in
determining FMV if they influenced the price.
These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property.
Rate of increase or decrease in value. Unless you can show that there were unusual circumstances, it is assumed that the increase or
decrease in the value of your donated property
from your cost has been at a reasonable rate.
For time adjustments, an appraiser may consider published price indexes for information on
general price trends, building costs, commodity
costs, securities, and works of art sold at auction
in arm’s-length sales.
Example. Bill Brown bought a painting for
$10,000. Thirteen months later he gave it to an
art museum, claiming a charitable deduction of
$15,000 on his tax return. The appraisal of the
painting should include information showing that
there were unusual circumstances that justify a
50% increase in value for the 13 months Bill held
the property.
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Table 1. Factors That Affect FMV
IF the factor you are
considering is...

Replacement Cost

THEN you should ask these questions...

cost or selling price

Was the purchase or sale of the property reasonably close to the
date of contribution?
Was any increase or decrease in value, as compared to your cost,
at a reasonable rate?
Do the terms of purchase or sale limit what can be done with the
property?
Was there an arm’s-length offer to buy the property close to the
valuation date?

sales of comparable
properties

How similar is the property sold to the property donated?
How close is the date of sale to the valuation date?
Was the sale at arm’s-length?
What was the condition of the market at the time of sale?

replacement cost

What would it cost to replace the donated property?
Is there a reasonable relationship between replacement cost and
FMV?
Is the supply of the donated property more or less than the demand
for it?

opinions of experts

Is the expert knowledgeable and competent?
Is the opinion thorough and supported by facts and experience?

Arm’s-length offer. An arm’s-length offer to
buy the property close to the valuation date may
help to prove its value if the person making the
offer was willing and able to complete the transaction. To rely on an offer, you should be able to
show proof of the offer and the specific amount
to be paid. Offers to buy property other than the
donated item will help to determine value if the
other property is reasonably similar to the
donated property.

Sales of Comparable
Properties
The sales prices of properties similar to the
donated property are often important in determining the FMV. The weight to be given to each
sale depends on the following.

• The degree of similarity between the property sold and the donated property.

• The time of the sale — whether it was
close to the valuation date.

• The circumstances of the sale — whether it
was at arm’s-length with a knowledgeable
buyer and seller, with neither having to
act.

• The conditions of the market in which the
sale was made — whether unusually inflated or deflated.
The comparable sales method of valuing real
estate is explained later under Valuation of Various Kinds of Property.
Example 1. Mary Black, who is not a book
dealer, paid a promoter $10,000 for 500 copies
of a single edition of a modern translation of the
Bible. The promoter had claimed that the price
was considerably less than the “retail” price, and
gave her a statement that the books had a total
retail value of $30,000. The promoter advised
Publication 561 (April 2007)

her that if she kept the Bibles for more than 1
year and then gave them to a qualified organization, she could claim a charitable deduction for
the “retail” price of $30,000. Thirteen months
later she gave all the Bibles to a church that she
selected from a list provided by the promoter. At
the time of her donation, wholesale dealers were
selling similar quantities of Bibles to the general
public for $10,000.

The cost of buying, building, or manufacturing
property similar to the donated item should be
considered in determining FMV. However, there
must be a reasonable relationship between the
replacement cost and the FMV.
The replacement cost is the amount it would
cost to replace the donated item on the valuation
date. Often there is no relationship between the
replacement cost and the FMV. If the supply of
the donated property is more or less than the
demand for it, the replacement cost becomes
less important.
To determine the replacement cost of the
donated property, find the “estimated replacement cost new.” Then subtract from this figure
an amount for depreciation due to the physical
condition and obsolescence of the donated
property. You should be able to show the relationship between the depreciated replacement
cost and the FMV, as well as how you arrived at
the “estimated replacement cost new.”

Opinions of Experts
Generally, the weight given to an expert’s opinion on matters such as the authenticity of a coin
or a work of art, or the most profitable and best
use of a piece of real estate, depends on the
knowledge and competence of the expert and
the thoroughness with which the opinion is supported by experience and facts. For an expert’s
opinion to deserve much weight, the facts must
support the opinion. For additional information,
see Appraisals, later.

Problems in Determining
Fair Market Value

The FMV of the Bibles is $10,000, the price
at which similar quantities of Bibles were being
sold to others at the time of the contribution.

There are a number of problems in determining
the FMV of donated property.

Example 2. The facts are the same as in
Example 1, except that the promoter gave Mary
Black a second option. The promoter said that if
Mary wanted a charitable deduction within 1
year of the purchase, she could buy the 500
Bibles at the “retail” price of $30,000, paying
only $10,000 in cash and giving a promissory
note for the remaining $20,000. The principal
and interest on the note would not be due for 12
years. According to the promoter, Mary could
then, within 1 year of the purchase, give the
Bibles to a qualified organization and claim the
full $30,000 retail price as a charitable contribution. She purchased the Bibles under the second option and, 3 months later, gave them to a
church, which will use the books for church purposes.

Unusual Market
Conditions

At the time of the gift, the promoter was
selling similar lots of Bibles for either $10,000 or
$30,000. The difference between the two prices
was solely at the discretion of the buyer. The
promoter was a willing seller for $10,000. Therefore, the value of Mary’s contribution of the Bibles is $10,000, the amount at which similar lots
of Bibles could be purchased from the promoter
by members of the general public.

The sale price of the property itself in an
arm’s-length transaction in an open market is
often the best evidence of its value. When you
rely on sales of comparable property, the sales
must have been made in an open market. If
those sales were made in a market that was
artificially supported or stimulated so as not to
be truly representative, the prices at which the
sales were made will not indicate the FMV.
For example, liquidation sale prices usually
do not indicate the FMV. Also, sales of stock
under unusual circumstances, such as sales of
small lots, forced sales, and sales in a restricted
market, may not represent the FMV.

Selection of
Comparable Sales
Using sales of comparable property is an important method for determining the FMV of donated
property. However, the amount of weight given
to a sale depends on the degree of similarity
between the comparable and the donated
properties. The degree of similarity must be
close enough so that this selling price would
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have been given consideration by reasonably
well-informed buyers or sellers of the property.
Example. You give a rare, old book to your
former college. The book is a third edition and is
in poor condition because of a missing back
cover. You discover that there was a sale for
$300, near the valuation date, of a first edition of
the book that was in good condition. Although
the contents are the same, the books are not at
all similar because of the different editions and
their physical condition. Little consideration
would be given to the selling price of the $300
property by knowledgeable buyers or sellers.

Future Events
You may not consider unexpected events happening after your donation of property in making
the valuation. You may consider only the facts
known at the time of the gift, and those that
could be reasonably expected at the time of the
gift.
Example. You give farmland to a qualified
charity. The transfer provides that your mother
will have the right to all income and full use of the
property for her life. Even though your mother
dies 1 week after the transfer, the value of the
property on the date it is given is its present
value, subject to the life interest as estimated
from actuarial tables. You may not take a higher
deduction because the charity received full use
and possession of the land only 1 week after the
transfer.

Using Past Events to
Predict the Future
A common error is to rely too much on past
events that do not fairly reflect the probable
future earnings and FMV.
Example. You give all your rights in a successful patent to your favorite charity. Your records show that before the valuation date there
were three stages in the patent’s history of earnings. First, there was rapid growth in earnings
when the invention was introduced. Then, there
was a period of high earnings when the invention was being exploited. Finally, there was a
decline in earnings when competing inventions
were introduced. The entire history of earnings
may be relevant in estimating the future earnings. However, the appraiser must not rely too
much on the stage of rapid growth in earnings,
or of high earnings. The market conditions at
those times do not represent the condition of the
market at the valuation date. What is most significant is the trend of decline in earnings up to the
valuation date. For more information about donations of patents, see Patents, later.

Household Goods
The FMV of used household goods, such as
furniture, appliances, and linens, is usually
much lower than the price paid when new. Such
used property may have little or no market value
because of its worn condition. It may be out of
style or no longer useful.
You cannot take a deduction for household
goods donated after August 17, 2006, unless
they are in good used condition or better. A
household good that is not in good used condition or better for which you take a deduction of
more than $500 requires a qualified appraisal.
See Deduction over $500 for certain clothing or
household items, later.
If the property is valuable because it is old or
unique, see the discussion under Paintings, Antiques, and Other Objects of Art.

Used Clothing
Used clothing and other personal items are usually worth far less than the price you paid for
them. Valuation of items of clothing does not
lend itself to fixed formulas or methods.
The price that buyers of used items actually
pay in used clothing stores, such as consignment or thrift shops, is an indication of the value.
You cannot take a deduction for clothing
donated after August 17, 2006, unless it is in
good used condition or better. An item of clothing that is not in good used condition or better for
which you take a deduction of more than $500
requires a qualified appraisal. See Deduction
over $500 for certain clothing or household
items, later.
For valuable furs or very expensive gowns, a
Form 8283 may have to be sent with your tax
return.

Jewelry and Gems
Jewelry and gems are of such a specialized
nature that it is almost always necessary to get
an appraisal by a specialized jewelry appraiser.
The appraisal should describe, among other
things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion.
If not in fashion, the possibility of having the
property redesigned, recut, or reset should be
reported in the appraisal. The stone’s coloring,
weight, cut, brilliance, and flaws should be reported and analyzed. Sentimental personal
value has no effect on FMV. But if the jewelry
was owned by a famous person, its value might
increase.

Paintings, Antiques,
and Other Objects of Art

Valuation of Various
Kinds of Property

Your deduction for contributions of paintings,
antiques, and other objects of art, should be
supported by a written appraisal from a qualified
and reputable source, unless the deduction is
$5,000 or less. Examples of information that
should be included in appraisals of art objects —
paintings in particular — are found later under
Qualified Appraisal.

This section contains information on determining the FMV of ordinary kinds of donated property. For information on appraisals, see
Appraisals, later.

Art valued at $20,000 or more. If you claim a
deduction of $20,000 or more for donations of
art, you must attach a complete copy of the
signed appraisal to your return. For individual

Page 4

objects valued at $20,000 or more, a photograph of a size and quality fully showing the
object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4
x 5 inches, must be provided upon request.
Art valued at $50,000 or more. If you donate
an item of art that has been appraised at
$50,000 or more, you can request a Statement
of Value for that item from the IRS. You must
request the statement before filing the tax return
that reports the donation. Your request must
include the following.

• A copy of a qualified appraisal of the item.
See Qualified Appraisal, later.

• A $2,500 check or money order payable to
the Internal Revenue Service for the user
fee that applies to your request regarding
one, two, or three items of art. Add $250
for each item in excess of three.

• A completed Form 8283, Section B.
• The location of the IRS territory that has
examination responsibility for your return.
If your request lacks essential information, you
will be notified and given 30 days to provide the
missing information.
Send your request to:
Internal Revenue Service
Attention: Art Appraisal (C:AP:ART)
P.O. Box 27720
McPherson Station
Washington, DC 20038
Refunds. You can withdraw your request
for a Statement of Value at any time before it is
issued. However, the IRS will not refund the user
fee if you do.
If the IRS declines to issue a Statement of
Value in the interest of efficient tax administration, the IRS will refund the user fee.
Authenticity. The authenticity of the donated
art must be determined by the appraiser.
Physical condition. Important items in the
valuation of antiques and art are physical condition and extent of restoration. These have a
significant effect on the value and must be fully
reported in an appraisal. An antique in damaged
condition, or lacking the “original brasses,” may
be worth much less than a similar piece in excellent condition.
Art appraisers. More weight will usually be
given to an appraisal prepared by an individual
specializing in the kind and price range of the art
being appraised. Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. Their opinions on
the authenticity and desirability of such art would
usually be given more weight than the opinions
of more generalized art dealers or appraisers.
They can report more recent comparable sales
to support their opinion.
To identify and locate experts on unique,
specialized items or collections, you may wish to
use the current Official Museum Directory of the
American Association of Museums. It lists museums both by state and by category.
To help you locate a qualified appraiser for
your donation, you may wish to ask an art historian at a nearby college or the director or curator
of a local museum. The Yellow Pages often list
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specialized art and antique dealers, auctioneers, and art appraisers. You may be able to find
a qualified appraiser on the Internet. You may
also contact associations of dealers for guidance.

Collections
Since many kinds of hobby collections may be
the subject of a charitable donation, it is not
possible to discuss all of the possible collectibles in this publication. Most common are
rare books, autographs, sports memorabilia,
dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. Many
of the elements of valuation that apply to paintings and other objects of art, discussed earlier,
also apply to miscellaneous collections.
Reference material. Publications available to
help you determine the value of many kinds of
collections include catalogs, dealers’ price lists,
and specialized hobby periodicals. When using
one of these price guides, you must use the
current edition at the date of contribution. However, these sources are not always reliable indicators of FMV and should be supported by
other evidence.
For example, a dealer may sell an item for
much less than is shown on a price list, particularly after the item has remained unsold for a
long time. The price an item sold for in an auction may have been the result of a rigged sale or
a mere bidding duel. The appraiser must analyze the reference material, and recognize and
make adjustments for misleading entries. If you
are donating a valuable collection, you should
get an appraisal. If your donation appears to be
of little value, you may be able to make a satisfactory valuation using reference materials
available at a state, city, college, or museum
library.
Stamp collections. Most libraries have catalogs or other books that report the publisher’s
estimate of values. Generally, two price levels
are shown for each stamp: the price postmarked
and the price not postmarked. Stamp dealers
generally know the value of their merchandise
and are able to prepare satisfactory appraisals
of valuable collections.
Coin collections. Many catalogs and other
reference materials show the writer’s or publisher’s opinion of the value of coins on or near
the date of the publication. Like many other
collectors’ items, the value of a coin depends on
the demand for it, its age, and its rarity. Another
important factor is the coin’s condition. For example, there is a great difference in the value of
a coin that is in mint condition and a similar coin
that is only in good condition.
Catalogs usually establish a category for
coins, based on their physical condition — mint
or uncirculated, extremely fine, very fine, fine,
very good, good, fair, or poor — with a different
valuation for each category.
Books. The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences
between the comparable sales and the item
being evaluated. This is difficult to do and, except for a collection of little value, should be
done by a specialized appraiser. Within the general category of literary property, there are dealers who specialize in certain areas, such as
Publication 561 (April 2007)

Americana, foreign imports, Bibles, and scientific books.
Modest value of collection. If the collection you are donating is of modest value, not
requiring a written appraisal, the following information may help you in determining the FMV.
A book that is very old, or very rare, is not
necessarily valuable. There are many books
that are very old or rare, but that have little or no
market value.
Condition of book. The condition of a book
may have a great influence on its value. Collectors are interested in items that are in fine, or at
least good, condition. When a book has a missing page, a loose binding, tears, stains, or is
otherwise in poor condition, its value is greatly
lowered.
Other factors. Some other factors in the
valuation of a book are the kind of binding
(leather, cloth, paper), page edges, and illustrations (drawings and photographs). Collectors
usually want first editions of books. However,
because of changes or additions, other editions
are sometimes worth as much as, or more than,
the first edition.
Manuscripts, autographs, diaries, and similar items. When these items are handwritten,
or at least signed by famous people, they are
often in demand and are valuable. The writings
of unknowns also may be of value if they are of
unusual historical or literary importance. Determining the value of such material is difficult. For
example, there may be a great difference in
value between two diaries that were kept by a
famous person — one kept during childhood and
the other during a later period in his or her life.
The appraiser determines a value in these
cases by applying knowledge and judgment to
such factors as comparable sales and conditions.
Signatures. Signatures, or sets of signatures,
that were cut from letters or other papers usually
have little or no value. But complete sets of the
signatures of U.S. presidents are in demand.

Cars, Boats, and Aircraft

dealer retail value, of a similar vehicle. However,
the FMV may be less than that amount if the
vehicle has engine trouble, body damage, high
mileage, or any type of excessive wear. The
FMV of a donated vehicle is the same as the
price listed in a used vehicle pricing guide for a
private party sale only if the guide lists a sales
price for a vehicle that is the same make, model,
and year, sold in the same area, in the same
condition, with the same or similar options or
accessories, and with the same or similar warranties as the donated vehicle.
Example. You donate a used car in poor
condition to a local high school for use by students studying car repair. A used car guide
shows the dealer retail value for this type of car
in poor condition is $1,600. However, the guide
shows the price for a private party sale of the car
is only $750. The FMV of the car is considered to
be no more than $750.
Boats. Except for inexpensive small boats,
the valuation of boats should be based on an
appraisal by a marine surveyor because the
physical condition is so critical to the value.
More information. Your deduction for a
donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the
qualified organization. This rule applies if the
claimed value of the donated vehicle is more
than $500. In certain cases, you can deduct the
vehicle’s FMV. For details, see Publication 526.

Inventory
If you donate any inventory item to a charitable
organization, the amount of your deductible contribution generally is the FMV of the item, minus
any gain you would have realized if you had sold
the item at its FMV on the date of the gift. For
more information, see Publication 526.

Patents
To determine the FMV of a patent, you must
take into account, among other factors:

• Whether the patented technology has
been made obsolete by other technology;

If you donate a car, a boat, or an aircraft to a
charitable organization, its FMV must be determined.
Certain commercial firms and trade organizations publish monthly or seasonal guides for
different regions of the country, containing complete dealer sale prices or dealer average prices
for recent model years. Prices are reported for
each make, model, and year. These guides also
provide estimates for adjusting for unusual
equipment, unusual mileage, and physical condition. The prices are not “official,” and these
publications are not considered an appraisal of
any specific donated property. But they do provide clues for making an appraisal and suggest
relative prices for comparison with current sales
and offerings in your area.
These publications are sometimes available
from public libraries or at a bank, credit union, or
finance company. You can also find pricing information about used cars on the Internet.
An acceptable measure of the FMV of a
donated car, boat, or airplane is an amount not
in excess of the price listed in a used vehicle
pricing guide for a private party sale, not the

• Any restrictions on the donee’s use of, or
ability to transfer, the patented technology;
and

• The length of time remaining before the
patent expires.
However, your deduction for a donation of a
patent or other intellectual property is its FMV,
minus any gain you would have realized if you
had sold the property at its FMV on the date of
the gift. Generally, this means your deduction is
the lesser of the property’s FMV or its basis. For
details, see Publication 526.

Stocks and Bonds
The value of stocks and bonds is the FMV of a
share or bond on the valuation date. See Date of
contribution, earlier, under What Is Fair Market
Value (FMV).
Selling prices on valuation date. If there is
an active market for the contributed stocks or
b o n d s o n a s t o c k e x c ha n g e , i n a n
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over-the-counter market, or elsewhere, the FMV
of each share or bond is the average price between the highest and lowest quoted selling
prices on the valuation date. For example, if the
highest selling price for a share was $11, and
the lowest $9, the average price is $10. You get
the average price by adding $11 and $9 and
dividing the sum by 2.
No sales on valuation date. If there were
no sales on the valuation date, but there were
sales within a reasonable period before and
after the valuation date, you determine FMV by
taking the average price between the highest
and lowest sales prices on the nearest date
before and on the nearest date after the valuation date. Then you weight these averages in
inverse order by the respective number of trading days between the selling dates and the valuation date.
Example. On the day you gave stock to a
qualified organization, there were no sales of the
stock. Sales of the stock nearest the valuation
date took place two trading days before the
valuation date at an average selling price of $10
and three trading days after the valuation date at
an average selling price of $15. The FMV on the
valuation date was $12, figured as follows:
[(3 x $10)

+

(2 x $15)]

÷

5

= $12

Listings on more than one stock exchange. Stocks or bonds listed on more than
one stock exchange are valued based on the
prices of the exchange on which they are principally dealt. This applies if these prices are published in a generally available listing or
publication of general circulation. If this is not
applicable, and the stocks or bonds are reported
on a composite listing of combined exchanges in
a publication of general circulation, use the composite list. See also Unavailable prices or
closely held corporation, later.
Bid and asked prices on valuation date. If
there were no sales within a reasonable period
before and after the valuation date, the FMV is
the average price between the bona fide bid and
asked prices on the valuation date.
Example. Although there were no sales of
Blue Corporation stock on the valuation date,
bona fide bid and asked prices were available on
that date of $14 and $16, respectively. The FMV
is $15, the average price between the bid and
asked prices.
No prices on valuation date. If there were
no prices available on the valuation date, you
determine FMV by taking the average prices
between the bona fide bid and asked prices on
the closest trading date before and after the
valuation date. Both dates must be within a
reasonable period. Then you weight these averages in inverse order by the respective number
of trading days between the bid and asked dates
and the valuation date.
Example. On the day you gave stock to a
qualified organization, no prices were available.
Bona fide bid and asked prices 3 days before the
valuation date were $10 and 2 days after the
valuation date were $15. The FMV on the valuation date is $13, figured as follows:
[(2 x $10)
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+

(3 x $15)]

÷

5

= $13

Prices only before or after valuation date, but
not both. If no selling prices or bona fide bid
and asked prices are available on a date within a
reasonable period before the valuation date, but
are available on a date within a reasonable period after the valuation date, or vice versa, then
the average price between the highest and lowest of such available prices may be treated as
the value.
Large blocks of stock. When a large block of
stock is put on the market, it may lower the
selling price of the stock if the supply is greater
than the demand. On the other hand, market
forces may exist that will afford higher prices for
large blocks of stock. Because of the many factors to be considered, determining the value of
large blocks of stock usually requires the help of
experts specializing in underwriting large quantities of securities, or in trading in the securities of
the industry of which the particular company is a
part.
Unavailable prices or closely held corporation. If selling prices or bid and asked prices
are not available, or if securities of a closely held
corporation are involved, determine the FMV by
considering the following factors.

• For bonds, the soundness of the security,
the interest yield, the date of maturity, and
other relevant factors.

• For shares of stock, the company’s net
worth, prospective earning power and dividend-paying capacity, and other relevant
factors.
Other factors.
clude:

Other relevant factors in-

• The nature and history of the business,
especially its recent history,

• The goodwill of the business,
• The economic outlook in the particular industry,

• The company’s position in the industry, its
competitors, and its management, and

• The value of securities of corporations engaged in the same or similar business.
For preferred stock, the most important factors
are its yield, dividend coverage, and protection
of its liquidation preference.
You should keep complete financial and other
information on which the valuation is based.
This includes copies of reports of examinations
of the company made by accountants, engineers, or any technical experts on or close to the
valuation date.
Restricted securities. Some classes of stock
cannot be traded publicly because of restrictions
imposed by the Securities and Exchange Commission, or by the corporate charter or a trust
agreement. These restricted securities usually
trade at a discount in relation to freely traded
securities.
To arrive at the FMV of restricted securities,
factors that you must consider include the resale
provisions found in the restriction agreements,
the relative negotiating strengths of the buyer
and seller, and the market experience of freely
traded securities of the same class as the restricted securities.

Real Estate
Because each piece of real estate is unique and
its valuation is complicated, a detailed appraisal
by a professional appraiser is necessary.
The appraiser must be thoroughly trained in
the application of appraisal principles and theory. In some instances the opinions of equally
qualified appraisers may carry unequal weight,
such as when one appraiser has a better knowledge of local conditions.
The appraisal report must contain a complete description of the property, such as street
address, legal description, and lot and block
number, as well as physical features, condition,
and dimensions. The use to which the property
is put, zoning and permitted uses, and its potential use for other higher and better uses are also
relevant.
In general, there are three main approaches
to the valuation of real estate. An appraisal may
require the combined use of two or three methods rather than one method only.

1. Comparable Sales
The comparable sales method compares the
donated property with several similar properties
that have been sold. The selling prices, after
adjustments for differences in date of sale, size,
condition, and location, would then indicate the
estimated FMV of the donated property.
If the comparable sales method is used to
determine the value of unimproved real property
(land without significant buildings, structures, or
any other improvements that add to its value),
the appraiser should consider the following factors when comparing the potential comparable
property and the donated property:

• Location, size, and zoning or use restrictions,

• Accessibility and road frontage, and available utilities and water rights,

• Riparian rights (right of access to and use
of the water by owners of land on the bank
of a river) and existing easements,
rights-of-way, leases, etc.,

• Soil characteristics, vegetative cover, and
status of mineral rights, and

• Other factors affecting value.
For each comparable sale, the appraisal must
include the names of the buyer and seller, the
deed book and page number, the date of sale
and selling price, a property description, the
amount and terms of mortgages, property
surveys, the assessed value, the tax rate, and
the assessor’s appraised FMV.
The comparable selling prices must be adjusted to account for differences between the
sale property and the donated property. Because differences of opinion may arise between
appraisers as to the degree of comparability and
the amount of the adjustment considered necessary for comparison purposes, an appraiser
should document each item of adjustment.
Only comparable sales having the least adjustments in terms of items and/or total dollar
adjustments should be considered as comparable to the donated property.
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2. Capitalization of Income
This method capitalizes the net income from the
property at a rate that represents a fair return on
the particular investment at the particular time,
considering the risks involved. The key elements are the determination of the income to be
capitalized and the rate of capitalization.

3. Replacement Cost New or
Reproduction Cost Minus
Observed Depreciation
This method, used alone, usually does not result
in a determination of FMV. Instead, it generally
tends to set the upper limit of value, particularly
in periods of rising costs, because it is reasonable to assume that an informed buyer will not
pay more for the real estate than it would cost to
reproduce a similar property. Of course, this
reasoning does not apply if a similar property
cannot be created because of location, unusual
construction, or some other reason. Generally,
this method serves to support the value determined from other methods. When the replacement cost method is applied to improved realty,
the land and improvements are valued separately.
The replacement cost of a building is figured
by considering the materials, the quality of workmanship, and the number of square feet or cubic
feet in the building. This cost represents the total
cost of labor and material, overhead, and profit.
After the replacement cost has been figured,
consideration must be given to the following
factors:

• Physical deterioration — the wear and tear
on the building itself,

• Functional obsolescence — usually in older
buildings with, for example, inadequate
lighting, plumbing, or heating, small
rooms, or a poor floor plan, and

• Economic obsolescence — outside forces
causing the whole area to become less
desirable.

Interest in a Business
The FMV of any interest in a business, whether
a sole proprietorship or a partnership, is the
amount that a willing buyer would pay for the
interest to a willing seller after consideration of
all relevant factors. The relevant factors to be
considered in valuing the business are:

• The FMV of the assets of the business,
• The demonstrated earnings capacity of
the business, based on a review of past
and current earnings, and

• The other factors used in evaluating corporate stock, if they apply.
The value of the goodwill of the business
should also be taken into consideration. You
should keep complete financial and other information on which you base the valuation. This
includes copies of reports of examinations of the
business made by accountants, engineers, or
any technical experts on or close to the valuation
date.
Publication 561 (April 2007)

Annuities, Interests for
Life or Terms of
Years, Remainders, and
Reversions

For information on the circumstances under
which a charitable deduction may be allowed for
the donation of a partial interest in property not
in trust, see Partial Interest in Property Not in
Trust, later.

The value of these kinds of property is their
present value, except in the case of annuities
under contracts issued by companies regularly
engaged in their sale. The valuation of these
commercial annuity contracts and of insurance
policies is discussed later under Certain Life
Insurance and Annuity Contracts.
To determine present value, you must know
the applicable interest rate and use actuarial
tables.

Certain Life Insurance
and Annuity Contracts

Interest rate. The applicable interest rate varies. It is announced monthly in a news release
and published in the Internal Revenue Bulletin
as a Revenue Ruling. The interest rate to use is
under the heading “Rate Under Section 7520”
for a given month and year. You can call the IRS
office at 1-800-829-1040 to obtain this rate.
Actuarial tables. You need to refer to actuarial tables to determine a qualified interest in the
form of an annuity, any interest for life or a term
of years, or any remainder interest to a charitable organization.
Use the valuation tables set forth in IRS
Publications 1457, Actuarial Values (Book
Aleph), and 1458, Actuarial Values (Book Beth).
Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest
for life or for a term of years, or a remainder or
reversionary interest. For qualified charitable
transfers, you can use the factor for the month in
which you made the contribution or for either of
the 2 months preceding that month.
Publication 1457 also contains actuarial factors for computing the value of a remainder
interest in a charitable remainder annuity trust
and a pooled income fund. Publication 1458
contains the factors for valuing the remainder
interest in a charitable remainder unitrust. You
can download Publications 1457 and 1458 from
www.irs.gov. In addition, they are available for
purchase via the website of the U. S. Government Printing Office, by phone at (202)
512-1800, or by mail from the:
Superintendent of Documents
P.O. Box 371954
Pittsburgh, PA 15250-7954
Tables containing actuarial factors for transfers
to pooled income funds may also be found in
Income Tax Regulation 1.642(c)-6(e)(6),
transfers to charitable remainder unitrusts in
Regulation 1.664-4(e), and other transfers in
Regulation 20.2031-7(d)(6).
Special factors. If you need a special factor
for an actual transaction, you can request a
letter ruling. Be sure to include the date of birth
of each person the duration of whose life may
affect the value of the interest. Also include
copies of the relevant instruments. IRS charges
a user fee for providing special factors.
For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual
update), 2006-1 I.R.B. 1. Revenue Procedure
2006-1 is available at
www.irs.gov/irb/2006-01_IRB/ar06.html.

The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is
the amount that company would charge for a
comparable contract.
But if the donee of a life insurance policy may
reasonably be expected to cash the policy rather
than hold it as an investment, then the FMV is
the cash surrender value rather than the replacement cost.
If an annuity is payable under a combination
annuity contract and life insurance policy (for
example, a retirement income policy with a
death benefit) and there was no insurance element when it was transferred to the charity, the
policy is treated as an annuity contract.

Partial Interest
in Property Not in Trust
Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than
your entire interest in property. However, this
does not apply to a transfer of less than your
entire interest if it is a transfer of:

• A remainder interest in your personal residence or farm,

• An undivided part of your entire interest in
property, or

• A qualified conservation contribution.

Remainder Interest in Real
Property
The amount of the deduction for a donation of a
remainder interest in real property is the FMV of
the remainder interest at the time of the contribution. To determine this value, you must know the
FMV of the property on the date of the contribution. Multiply this value by the appropriate factor.
Publications 1457 and 1458 contain these factors.
You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel).
You can use the factors for the month in which
you made the contribution or for either of the two
months preceding that month. See the earlier
discussion on Annuities, Interests for Life or
Terms of Years, Remainders, and Reversions.
You can download Publication 1459 from
www.irs.gov.
For this purpose, the term “depreciable property” means any property subject to wear and
tear or obsolescence, even if not used in a trade
or business or for the production of income.
If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be
allocated between each kind of property at the
time of the contribution. This rule also applies to
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a gift of a remainder interest that includes property that is part depletable and part not depletable. Take into account depreciation or
depletion only for the property that is subject to
depreciation or depletion.
For more information, see section 1.170A-12
of the Income Tax Regulations.

Undivided Part of Your Entire
Interest
A contribution of an undivided part of your entire
interest in property must consist of a part of each
and every substantial interest or right you own in
the property. It must extend over the entire term
of your interest in the property. For example, you
are entitled to the income from certain property
for your life (life estate) and you contribute 20%
of that life estate to a qualified organization. You
can claim a deduction for the contribution if you
do not have any other interest in the property. To
figure the value of a contribution involving a
partial interest, see Publication 1457.
If the only interest you own in real property is
a remainder interest and you transfer part of that
interest to a qualified organization, see the previous discussion on valuation of a remainder
interest in real property.

Qualified Conservation
Contribution
A qualified conservation contribution is a contribution of a qualified real property interest to a
qualified organization to be used only for conservation purposes.
Qualified organization. For purposes of a
qualified conservation contribution, a qualified
organization is:

• A governmental unit,
• A publicly supported charitable, religious,
scientific, literary, educational, etc., organization, or

• An organization that is controlled by, and
operated for the exclusive benefit of, a
governmental unit or a publicly supported
charity.
The organization also must have a commitment
to protect the conservation purposes of the donation and must have the resources to enforce
the restrictions.
Conservation purposes. Your contribution
must be made only for one of the following
conservation purposes.

• Preserving land areas for outdoor recreation by, or for the education of, the general
public.

• Protecting a relatively natural habitat of
fish, wildlife, or plants, or a similar ecosystem.

• Preserving open space, including farmland
and forest land, if it yields a significant
public benefit. It must be either for the
scenic enjoyment of the general public or
under a clearly defined federal, state, or
local governmental conservation policy.

• Preserving a historically important land
area or a certified historic structure. There
Page 8

must be some visual public access to the
property. Factors used in determining the
type and amount of public access required
include the historical significance of the
property, the remoteness or accessibility
of the site, and the extent to which intrusions on the privacy of individuals living on
the property would be unreasonable.
Building in registered historic district. A
contribution after July 25, 2006, of a qualified
real property interest that is an easement or
other restriction on the exterior of a building in a
registered historic district is deductible only if it
meets all of the following three conditions.
1. The restriction must preserve the entire exterior of the building and must prohibit any
change to the exterior of the building that
is inconsistent with its historical character.
2. You and the organization receiving the
contribution must enter into a written
agreement certifying, that the organization
is a qualified organization and that it has
the resources and commitment to maintain
the property as donated.
3. If you make the contribution in a tax year
beginning after August 17, 2006, you must
include with your return:
a. A qualified appraisal,
b. Photographs of the building’s entire exterior, and
c. A description of all restrictions on development of the building, such as zoning
laws and restrictive covenants.
If you make this type of contribution after
February 12, 2007, and claim a deduction of
more than $10,000, your deduction will not be
allowed unless you pay a $500 filing fee. See
Form 8283-V, Payment Voucher for Filing Fee
Under Section 170(f)(13), and its instructions.
Qualified real property interest. This is any
of the following interests in real property.
1. Your entire interest in real estate other
than a mineral interest (subsurface oil,
gas, or other minerals, and the right of
access to these minerals).
2. A remainder interest.
3. A restriction (granted in perpetuity) on the
use that may be made of the real property.
Valuation. A qualified real property interest
described in (1) should be valued in a manner
that is consistent with the type of interest transferred. If you transferred all the interest in the
property, the FMV of the property is the amount
of the contribution. If you do not transfer the
mineral interest, the FMV of the surface rights in
the property is the amount of the contribution.
If you owned only a remainder interest or an
income interest (life estate), see Undivided Part
of Your Entire Interest, earlier. If you owned the
entire property but transferred only a remainder
interest (item (2)), see Remainder Interest in
Real Property, earlier.
In determining the value of restrictions, you
should take into account the selling price in
arm’s-length transactions of other properties

that have comparable restrictions. If there are no
comparable sales, the restrictions are valued
indirectly as the difference between the FMVs of
the property involved before and after the grant
of the restriction.
The FMV of the property before contribution
of the restriction should take into account not
only current use but the likelihood that the property, without the restriction, would be developed.
You should also consider any zoning, conservation, or historical preservation laws that would
restrict development. Granting an easement
may increase, rather than reduce, the value of
property, and in such a situation no deduction
would be allowed.
Example. You own 10 acres of farmland.
Similar land in the area has an FMV of $2,000 an
acre. However, land in the general area that is
restricted solely to farm use has an FMV of
$1,500 an acre. Your county wants to preserve
open space and prevent further development in
your area.
You grant to the county an enforceable open
space easement in perpetuity on 8 of the 10
acres, restricting its use to farmland. The value
of this easement is $4,000, determined as follows:
FMV of the property before
granting easement:
$2,000 × 10 acres . . . . . . . . . . . . $20,000
FMV of the property after
granting easement:
$1,500 × 8 acres . . . . . . $12,000
$2,000 × 2 acres . . . . . .
4,000 16,000
Value of easement . . . . . .

$4,000

If you later transfer in fee your remaining
interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the
FMV of the 8 acres reduced by the FMV of the
easement granted to the first organization.
More information. For more information
about qualified conservation contributions, see
Publication 526.

Appraisals
Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or
less. (There is one exception, described next,
for certain clothing and household items.) However, you generally will need an appraisal for
donated property for which you claim a deduction of more than $5,000. There are exceptions.
See Deductions of More Than $5,000, later.
The weight given an appraisal depends on
the completeness of the report, the qualifications of the appraiser, and the appraiser’s
demonstrated knowledge of the donated property. An appraisal must give all the facts on
which to base an intelligent judgment of the
value of the property.
The appraisal will not be given much weight
if:

• All the factors that apply are not considered,

• The opinion is not supported with facts,
such as purchase price and comparable
sales, or
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• The opinion is not consistent with known
facts.
The appraiser’s opinion is never more valid
than the facts on which it is based; without these
facts it is simply a guess.
The opinion of a person claiming to be an
expert is not binding on the Internal Revenue
Service. All facts associated with the donation
must be considered.
Deduction over $500 for certain clothing or
household items. You must include with your
return a qualified appraisal of any single item of
clothing or any household item that is not in
good used condition or better, that you donated
after August 17, 2006, and for which you deduct
more than $500. See Household Goods and
Used Clothing, earlier.
Cost of appraisals. You may not take a charitable contribution deduction for fees you pay for
appraisals of your donated property. However,
these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A
(Form 1040) if paid to determine the amount
allowable as a charitable contribution.

170(e)(3)(A) of the Internal Revenue
Code, or

• Stock in trade, inventory, or property held
primarily for sale to customers in the ordinary course of your trade or business.
Although an appraisal is not required for the
types of property just listed, you must provide
certain information about a donation of any of
these types of property on Form 8283.
Publicly traded securities. Even if your
claimed deduction is more than $5,000, neither
a qualified appraisal nor Section B of Form 8283
is required for publicly traded securities that are:

• Listed on a stock exchange in which quotations are published on a daily basis,

• Regularly traded in a national or regional
over-the-counter market for which published quotations are available, or

• Shares of an open-end investment company (mutual fund) for which quotations
are published on a daily basis in a newspaper of general circulation throughout the
United States.

Deductions of More
Than $5,000

Publicly traded securities that meet these requirements must be reported on Form 8283,
Section A.

Generally, if the claimed deduction for an item or
group of similar items of donated property is
more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you
must attach Section B of Form 8283 to your tax
return. There are exceptions, discussed later.
You should keep the appraiser’s report with your
written records. Records are discussed in Publication 526.
The phrase “similar items” means property of
the same generic category or type (whether or
not donated to the same donee), such as stamp
collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded
stock, nonpublicly traded securities other than
nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment,
household appliances, toys, everyday kitchenware, china, crystal, or silver. For example, if
you give books to three schools and you deduct
$2,000, $2,500, and $900, respectively, your
claimed deduction is more than $5,000 for these
books. You must get a qualified appraisal of the
books and for each school you must attach a
fully completed Form 8283, Section B, to your
tax return.

A qualified appraisal is not required, but Form
8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not
meet the requirements just listed but does meet
these requirements:

Exceptions. You do not need an appraisal if
the property is:

• Nonpublicly traded stock of $10,000 or
less,

• A vehicle (including a car, boat, or airplane) for which your deduction is limited
to the gross proceeds from its sale,

• Qualified intellectual property, such as a
patent,

• Certain publicly traded securities described next,

• Inventory and other property donated by a
corporation that are “qualified contributions” for the care of the ill, the needy, or
infants, within the meaning of section
Publication 561 (April 2007)

1. The issue is regularly traded during the
computation period (defined later) in a
market for which there is an “interdealer
quotation system” (defined later),
2. The issuer or agent computes the “average trading price” (defined later) for the
same issue for the computation period,
3. The average trading price and total volume
of the issue during the computation period
are published in a newspaper of general
circulation throughout the United States,
not later than the last day of the month
following the end of the calendar quarter in
which the computation period ends,
4. The issuer or agent keeps books and records that list for each transaction during
the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the
market in which the transaction occurred,
and the trading price and volume, and
5. The issuer or agent permits the Internal
Revenue Service to review the books and
records described in item (4) with respect
to transactions during the computation period upon receiving reasonable notice.
An interdealer quotation system is any system of general circulation to brokers and dealers
that regularly disseminates quotations of obligations by two or more identified brokers or dealers
who are not related to either the issuer or agent
who computes the average trading price of the
security. A quotation sheet prepared and distributed by a broker or dealer in the regular course
of business and containing only quotations of

that broker or dealer is not an interdealer quotation system.
The average trading price is the average
price of all transactions (weighted by volume),
other than original issue or redemption transactions, conducted through a United States office
of a broker or dealer who maintains a market in
the issue of the security during the computation
period. Bid and asked quotations are not taken
into account.
The computation period is weekly during October through December and monthly during
January through September. The weekly computation periods during October through December begin with the first Monday in October
and end with the first Sunday following the last
Monday in December.
Nonpublicly traded stock. If you contribute nonpublicly traded stock, for which you claim
a deduction of $10,000 or less, a qualified appraisal is not required. However, you must attach Form 8283 to your tax return, with Section
B, Parts I and IV, completed.

Deductions of More Than
$500,000
If you claim a deduction of more than $500,000
for a donation of property, you must attach a
qualified appraisal of the property to your return.
This does not apply to contributions of cash,
inventory, publicly traded stock, or intellectual
property.
If you do not attach the appraisal, you cannot
deduct your contribution, unless your failure to
attach the appraisal is due to reasonable cause
and not to willful neglect.

Qualified Appraisal
Generally, if the claimed deduction for an item or
group of similar items of donated property is
more than $5,000, you must get a qualified appraisal made by a qualified appraiser. You must
also complete Form 8283, Section B, and attach
it to your tax return. See Deductions of More
Than $5,000, earlier.
A qualified appraisal is an appraisal document that:

• Is made, signed, and dated by a qualified
appraiser (defined later) in accordance
with generally accepted appraisal standards,

• Meets the relevant requirements of Regulations section 1.170A-13(c)(3) and Notice
2006-96, 2006-46 I.R.B. 902 (available at
www.irs.gov/irb/2006-46_IRB/ar13.html),

• Relates to an appraisal made not earlier
than 60 days before the date of contribution of the appraised property,

• Does not involve a prohibited appraisal
fee, and

• Includes certain information (covered
later).
You must receive the qualified appraisal
before the due date, including extensions, of the
return on which a charitable contribution deduction is first claimed for the donated property. If
the deduction is first claimed on an amended
return, the qualified appraisal must be received
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before the date on which the amended return is
filed.
Form 8283, Section B, must be attached to
your tax return. Generally, you do not need to
attach the qualified appraisal itself, but you
should keep a copy as long as it may be relevant
under the tax law. There are four exceptions.

• If you claim a deduction of $20,000 or
more for donations of art, you must attach
a complete copy of the appraisal. See
Paintings, Antiques, and Other Objects of
Art, earlier.

• If you claim a deduction of more than
$500,000 for a donation of property, you
must attach the appraisal. See Deductions
of More Than $500,000, earlier.

• If you claim a deduction of more than $500
for an article of clothing, or a household
item, that is not in good used condition or
better, that you donated after August 17,
2006, you must attach the appraisal. See
Deduction over $500 for certain clothing or
household items, earlier.

• If you claim a deduction in a tax year beginning after August 17, 2006, for an
easement or other restriction on the exterior of a building in a historic district, you
must attach the appraisal. See Building in
registered historic district, earlier.
Prohibited appraisal fee. Generally, no part
of the fee arrangement for a qualified appraisal
can be based on a percentage of the appraised
value of the property. If a fee arrangement is
based on what is allowed as a deduction, after
Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. However, appraisals are
not disqualified when an otherwise prohibited
fee is paid to a generally recognized association
that regulates appraisers if:

• The association is not organized for profit
and no part of its net earnings benefits any
private shareholder or individual,

• The appraiser does not receive any compensation from the association or any
other persons for making the appraisal,
and

• The fee arrangement is not based in
whole or in part on the amount of the appraised value that is allowed as a deduction after an Internal Revenue Service
examination or otherwise.
Information included in qualified appraisal.
A qualified appraisal must include the following
information:
1. A description of the property in sufficient
detail for a person who is not generally
familiar with the type of property to determine that the property appraised is the
property that was (or will be) contributed,
2. The physical condition of any tangible
property,
3. The date (or expected date) of contribution,
4. The terms of any agreement or understanding entered into (or expected to be
Page 10

entered into) by or on behalf of the donor
that relates to the use, sale, or other disposition of the donated property, including,
for example, the terms of any agreement
or understanding that:

2. The cost, date, and manner of acquisition.

a. Temporarily or permanently restricts a
donee’s right to use or dispose of the
donated property,

5. The facts on which the appraisal was
based, such as:

b. Earmarks donated property for a particular use, or
c. Reserves to, or confers upon, anyone
(other than a donee organization or an
organization participating with a donee
organization in cooperative fundraising)
any right to the income from the
donated property or to the possession
of the property, including the right to
vote donated securities, to acquire the
property by purchase or otherwise, or to
designate the person having the income, possession, or right to acquire
the property,
5. The name, address, and taxpayer identification number of the qualified appraiser
and, if the appraiser is a partner, an employee, or an independent contractor engaged by a person other than the donor,
the name, address, and taxpayer identification number of the partnership or the
person who employs or engages the appraiser,
6. The qualifications of the qualified appraiser
who signs the appraisal, including the appraiser’s background, experience, education, and any membership in professional
appraisal associations,
7. A statement that the appraisal was prepared for income tax purposes,
8. The date (or dates) on which the property
was valued,
9. The appraised FMV on the date (or expected date) of contribution,
10. The method of valuation used to determine
FMV, such as the income approach, the
comparable sales or market data approach, or the replacement cost less depreciation approach, and
11. The specific basis for the valuation, such
as any specific comparable sales transaction.
Art objects. The following are examples of
information that should be included in a description of donated property. These examples are
for art objects. A similar detailed breakdown
should be given for other property. Appraisals of
art objects — paintings in particular — should include all of the following.
1. A complete description of the object, indicating the:
a. Size,
b. Subject matter,
c. Medium,
d. Name of the artist (or culture), and
e. Approximate date created.

3. A history of the item, including proof of
authenticity.
4. A professional quality image of the object.

a. Sales or analyses of similar works by
the artist, particularly on or around the
valuation date.
b. Quoted prices in dealer’s catalogs of
the artist’s works or works of other artists of comparable stature.
c. A record of any exhibitions at which the
specific art object had been displayed.
d. The economic state of the art market at
the time of valuation, particularly with
respect to the specific property.
e. The standing of the artist in his profession and in the particular school or time
period.
Number of qualified appraisals. A separate qualified appraisal is required for each item
of property that is not included in a group of
similar items of property. You need only one
qualified appraisal for a group of similar items of
property contributed in the same tax year, but
you may get separate appraisals for each item.
A qualified appraisal for a group of similar items
must provide all of the required information for
each item of similar property. The appraiser,
however, may provide a group description for
selected items the total value of which is not
more than $100.
Qualified appraiser. A qualified appraiser is
an individual who meets all the following requirements.
1. The individual either:
a. Has earned an appraisal designation
from a recognized professional appraiser organization for demonstrated
competency in valuing the type of property being appraised, or
b. Has met certain minimum education
and experience requirements. For real
property, the appraiser must be licensed or certified for the type of property being appraised in the state in
which the property is located. For property other than real property, the appraiser must have successfully
completed college or professional-level
coursework relevant to the property being valued, must have at least 2 years
of experience in the trade or business
of buying, selling, or valuing the type of
property being valued, and must fully
describe in the appraisal his or her
qualifying education and experience.
2. The individual regularly prepares appraisals for which he or she is paid.
3. The individual demonstrates verifiable education and experience in valuing the type
of property being appraised. To do this, the
appraiser can make a declaration in the
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appraisal that, because of his or her background, experience, education, and membership in professional associations, he or
she is qualified to make appraisals of the
type of property being valued.
4. The individual has not been prohibited
from practicing before the IRS under section 330(c) of title 31 of the United States
Code at any time during the 3-year period
ending on the date of the appraisal.
5. The individual is not an excluded individual.
In addition, the appraiser must complete
Form 8283, Section B, Part III. More than one
appraiser may appraise the property, provided
that each complies with the requirements, including signing the qualified appraisal and Form
8283, Section B, Part III.
Excluded individuals. The following persons cannot be qualified appraisers with respect
to particular property.
1. The donor of the property, or the taxpayer
who claims the deduction.
2. The donee of the property.
3. A party to the transaction in which the donor acquired the property being appraised,
unless the property is donated within 2
months of the date of acquisition and its
appraised value is not more than its acquisition price. This applies to the person who
sold, exchanged, or gave the property to
the donor, or any person who acted as an
agent for the transferor or donor in the
transaction.
4. Any person employed by any of the above
persons. For example, if the donor acquired a painting from an art dealer,
neither the dealer nor persons employed
by the dealer can be qualified appraisers
for that painting.
5. Any person related under section 267(b) of
the Internal Revenue Code to any of the
above persons or married to a person related under section 267(b) to any of the
above persons.
6. An appraiser who appraises regularly for a
person in (1), (2), or (3), and who does not
perform a majority of his or her appraisals
made during his or her tax year for other
persons.
In addition, a person is not a qualified appraiser for a particular donation if the donor had
knowledge of facts that would cause a reasonable person to expect the appraiser to falsely
overstate the value of the donated property. For
example, if the donor and the appraiser make an
agreement concerning the amount at which the
property will be valued, and the donor knows
that amount is more than the FMV of the property, the appraiser is not a qualified appraiser for
the donation.
Appraiser penalties. An appraiser who
prepares an incorrect appraisal may have to pay
a penalty if:

Publication 561 (April 2007)

1. The appraiser knows or should have
known the appraisal would be used in connection with a return or claim for refund,
and
2. The appraisal results in the 20% or 40%
penalty for a valuation misstatement described later under Penalty.
The penalty imposed on the appraiser is the
smaller of:
1. The greater of:
a. 10% of the underpayment due to the
misstatement, or
b. $1,000, or
2. 125% of the gross income received for the
appraisal.
In addition, any appraiser who falsely or
fraudulently overstates the value of property described in a qualified appraisal of a Form 8283
that the appraiser has signed may be subject to
a civil penalty for aiding and abetting as understatement of tax liability, and may have his or her
appraisal disregarded.

Form 8283
Generally, if the claimed deduction for an item of
donated property is more than $5,000, you must
attach Form 8283 to your tax return and complete Section B.
If you do not attach Form 8283 to your return
and complete Section B, the deduction will not
be allowed unless your failure was due to reasonable cause, and not willful neglect, or was
due to a good faith omission. If the IRS requests
that you submit the form because you did not
attach it to your return, you must comply within
90 days of the request or the deduction will be
disallowed.
You must attach a separate Form 8283 for
each item of contributed property that is not part
of a group of similar items. If you contribute
similar items of property to the same donee
organization, you need attach only one Form
8283 for those items. If you contribute similar
items of property to more than one donee organization, you must attach a separate form for
each donee.

Internal Revenue Service
Review of Appraisals
In reviewing an income tax return, the Service
may accept the claimed value of the donated
property, based on information or appraisals
sent with the return, or may make its own determination of FMV. In either case, the Service
may:

• Contact the taxpayer to get more information,

• Refer the valuation problem to a Service
appraiser or valuation specialist,

• Refer the issue to the Commissioner’s Art
Advisory Panel (a group of dealers and
museum directors who review and recommend acceptance or adjustment of taxpayers’ claimed values for major paintings,
sculptures, decorative arts, and antiques),
or

• Contract with an independent dealer,
scholar, or appraiser to appraise the property when the objects require appraisers of
highly specialized experience and knowledge.
Responsibility of the Service. The Service is
responsible for reviewing appraisals, but it is not
responsible for making them. Supporting the
FMV listed on your return is your responsibility.
The Service does not accept appraisals without question. Nor does the Service recognize
any particular appraiser or organization of appraisers.
Timing of Service action. The Service generally does not approve valuations or appraisals
before the actual filing of the tax return to which
the appraisal applies. In addition, the Service
generally does not issue advance rulings approving or disapproving such appraisals.
Exception. For a request submitted as described earlier under Art valued at $50,000 or
more, the Service will issue a Statement of
Value that can be relied on by the donor of the
item of art.

Penalty
You may be liable for a penalty if you overstate
the value or adjusted basis of donated property.
20% penalty. The penalty is 20% of the underpayment of tax related to the overstatement
if:

• The value or adjusted basis claimed on
the return is 200% (150% for returns filed
after August 17, 2006) or more of the correct amount, and

• You underpaid your tax by more than
$5,000 because of the overstatement.
40% penalty.
20%, if:

The penalty is 40%, rather than

• The value or adjusted basis claimed on
the return is 400% (200% for returns filed
after August 17, 2006) or more of the correct amount, and

• You underpaid your tax by more than
$5,000 because of the overstatement.

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How To Get Tax Help
You can get help with unresolved tax issues,
order free publications and forms, ask tax questions, and get information from the IRS in several ways. By selecting the method that is best
for you, you will have quick and easy access to
tax help.
Contacting your Taxpayer Advocate. The
Taxpayer Advocate Service is an independent
organization within the IRS whose employees
assist taxpayers who are experiencing economic harm, who are seeking help in resolving
tax problems that have not been resolved
through normal channels, or who believe that an
IRS system or procedure is not working as it
should.
You can contact the Taxpayer Advocate
Service by calling toll-free 1-877-777-4778 or
TTY/TDD 1-800-829-4059 to see if you are eligible for assistance. You can also call or write to
your local taxpayer advocate, whose phone
number and address are listed in your local
telephone directory and in Publication 1546, The
Taxpayer Advocate Service of the IRS - How To
Get Help With Unresolved Tax Problems. You
can file Form 911, Application for Taxpayer Assistance Order, or ask an IRS employee to complete it on your behalf. For more information, go
to www.irs.gov/advocate.
Low income tax clinics (LITCs). LITCs are
independent organizations that provide low income taxpayers with representation in federal
tax controversies with the IRS for free or for a
nominal charge. The clinics also provide tax
education and outreach for taxpayers with limited English proficiency or who speak English as
a second language. Publication 4134, Low Income Taxpayer Clinic List, provides information
on clinics in your area. It is available at www.irs.
gov or at your local IRS office.
Free tax services. To find out what services
are available, get Publication 910, IRS Guide to
Free Tax Services. It contains a list of free tax
publications and describes other free tax information services, including tax education and
assistance programs and a list of TeleTax topics.
Internet. You can access the IRS website at www.irs.gov 24 hours a day, 7
days a week to:

• E-file your return. Find out about commercial tax preparation and e-file services
available free to eligible taxpayers.

• Check the status of your 2006 refund.
Click on Where’s My Refund. Wait at least
6 weeks from the date you filed your return (3 weeks if you filed electronically).
Have your 2006 tax return available because you will need to know your social
security number, your filing status, and the
exact whole dollar amount of your refund.

• Download forms, instructions, and publications.

• Order IRS products online.
• Research your tax questions online.
• Search publications online by topic or
keyword.
Page 12

• View Internal Revenue Bulletins (IRBs)
published in the last few years.

• Figure your withholding allowances using
our withholding calculator.

• Sign up to receive local and national tax
news by email.

• Get information on starting and operating
a small business.

Phone. Many services are available by
phone.

• Ordering forms, instructions, and publications. Call 1-800-829-3676 to order current-year forms, instructions, and
publications, and prior-year forms and instructions. You should receive your order
within 10 days.

• Asking tax questions. Call the IRS with
your tax questions at 1-800-829-1040.

• Solving problems. You can get
face-to-face help solving tax problems
every business day in IRS Taxpayer Assistance Centers. An employee can explain IRS letters, request adjustments to
your account, or help you set up a payment plan. Call your local Taxpayer Assistance Center for an appointment. To find
the number, go to www.irs.gov/localcontacts or look in the phone book under
United States Government, Internal Revenue Service.

• TTY/TDD equipment. If you have access
to TTY/TDD equipment, call
1-800-829-4059 to ask tax questions or to
order forms and publications.

• TeleTax topics. Call 1-800-829-4477 to listen to pre-recorded messages covering
various tax topics.

• Refund information. To check the status of
your 2006 refund, call 1-800-829-4477
and press 1 for automated refund information or call 1-800-829-1954. Be sure to
wait at least 6 weeks from the date you
filed your return (3 weeks if you filed electronically). Have your 2006 tax return
available because you will need to know
your social security number, your filing
status, and the exact whole dollar amount
of your refund.
Evaluating the quality of our telephone services. To ensure IRS representatives give accurate, courteous, and professional answers, we
use several methods to evaluate the quality of
our telephone services. One method is for a
second IRS representative to listen in on or
record random telephone calls. Another is to ask
some callers to complete a short survey at the
end of the call.
Walk-in. Many products and services
are available on a walk-in basis.

• Products. You can walk in to many post
offices, libraries, and IRS offices to pick up
certain forms, instructions, and publications. Some IRS offices, libraries, grocery

stores, copy centers, city and county government offices, credit unions, and office
supply stores have a collection of products
available to print from a CD or photocopy
from reproducible proofs. Also, some IRS
offices and libraries have the Internal Revenue Code, regulations, Internal Revenue
Bulletins, and Cumulative Bulletins available for research purposes.

• Services. You can walk in to your local
Taxpayer Assistance Center every business day for personal, face-to-face tax
help. An employee can explain IRS letters,
request adjustments to your tax account,
or help you set up a payment plan. If you
need to resolve a tax problem, have questions about how the tax law applies to your
individual tax return, or you’re more comfortable talking with someone in person,
visit your local Taxpayer Assistance
Center where you can spread out your
records and talk with an IRS representative face-to-face. No appointment is necessary, but if you prefer, you can call your
local Center and leave a message requesting an appointment to resolve a tax
account issue. A representative will call
you back within 2 business days to schedule an in-person appointment at your convenience. To find the number, go to
www.irs.gov/localcontacts or look in the
phone book under United States Government, Internal Revenue Service.
Mail. You can send your order for
forms, instructions, and publications to
the address below. You should receive
a response within 10 business days after your
request is received.
National Distribution Center
P.O. Box 8903
Bloomington, IL 61702-8903
CD for tax products. You can order
Publication 1796, IRS Tax Products
CD, and obtain:

• A CD that is released twice so you have
the latest products. The first release ships
in January and the final release ships in
March.

• Current-year forms, instructions, and publications.

• Prior-year forms, instructions, and publications.

• Bonus: Historical Tax Products DVD Ships with the final release.

• Tax Map: an electronic research tool and
finding aid.

• Tax law frequently asked questions.
• Tax Topics from the IRS telephone response system.

• Fill-in, print, and save features for most tax
forms.

• Internal Revenue Bulletins.
• Toll-free and email technical support.
Buy the CD from National Technical Information Service (NTIS) at www.irs.gov/cdorders for
Publication 561 (April 2007)

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$25 (no handling fee) or call 1-877-CDFORMS
(1-877-233-6767) toll free to buy the CD for $25
(plus a $5 handling fee). Price is subject to
change.
CD for small businesses. Publication
3207, The Small Business Resource
Guide CD for 2006, is a must for every
small business owner or any taxpayer about to
start a business. This year’s CD includes:

• Helpful information, such as how to prepare a business plan, find financing for
your business, and much more.

Publication 561 (April 2007)

• All the business tax forms, instructions,
and publications needed to successfully
manage a business.

• Tax law changes for 2006.
• Tax Map: an electronic research tool and
finding aid.

• Web links to various government agencies, business associations, and IRS organizations.

• “Rate the Product” survey — your opportu-

• A site map of the CD to help you navigate
the pages of the CD with ease.

• An interactive “Teens in Biz” module that
gives practical tips for teens about starting
their own business, creating a business
plan, and filing taxes.
An updated version of this CD is available
each year in early April. You can get a free copy
by calling 1-800-829-3676 or by visiting
www.irs.gov/smallbiz.

nity to suggest changes for future editions.

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Index

To help us develop a more useful index, please let us know if you have ideas for index entries.
See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

A
Aircraft . . . . . . . . . . . . . . . . . . . . . . . 5
Annuities . . . . . . . . . . . . . . . . . . . . . 7
Annuity contracts . . . . . . . . . . . . 7
Antiques . . . . . . . . . . . . . . . . . . . . . 4
Appraisals . . . . . . . . . . . . . . . . . . . 8
Cost of . . . . . . . . . . . . . . . . . . . . . 9
IRS review of . . . . . . . . . . . . . . 11
Qualified appraisal . . . . . . . . . . 9
Appraiser . . . . . . . . . . . . . . . . . . . 10
Art objects . . . . . . . . . . . . . . . . . . . 4
Valued at $20,000 or
more . . . . . . . . . . . . . . . . . . . . . 4
Valued at $50,000 or
more . . . . . . . . . . . . . . . . . . . . . 4
Assistance (See Tax help)

B
Boats . . . . . . . . . . . . . . . . . . . . . . . .
Bonds . . . . . . . . . . . . . . . . . . . . . . . .
Books . . . . . . . . . . . . . . . . . . . . . . . .
Business, interest in . . . . . . . . .

5
5
5
7

C
Cars . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Clothing, used . . . . . . . . . . . . . 4, 9
Coins . . . . . . . . . . . . . . . . . . . . . . . . 5
Collections . . . . . . . . . . . . . . . . . . . 5
Books . . . . . . . . . . . . . . . . . . . . . . 5
Coins . . . . . . . . . . . . . . . . . . . . . . . 5
Stamps . . . . . . . . . . . . . . . . . . . . . 5
Comments on publication . . . . 1
Comparable properties, sales
of . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Conservation contribution . . . . 8
Cost . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Rate of increase or
decrease . . . . . . . . . . . . . . . . . 2

Page 14

Terms of purchase or
sale . . . . . . . . . . . . . . . . . . . . . . 2

J

S

Jewelry and gems . . . . . . . . . . . . 4

Stamps . . . . . . . . . . . . . . . . . . . . . . . 5
Statement of Value . . . . . . . . . . 11
Stocks . . . . . . . . . . . . . . . . . . . . . . . 5
Suggestions for
publication . . . . . . . . . . . . . . . . . 1

D

L

Date of contribution . . . . . . . . . . 2
Deductions of more than
$5,000 . . . . . . . . . . . . . . . . . . . . . . 9
Deductions of more than
$500,000 . . . . . . . . . . . . . . . . . . . 9

Life insurance . . . . . . . . . . . . . . . . 7

F
Fair market value . . . . . . . . . . . . . 2
Comparable properties, sales
of . . . . . . . . . . . . . . . . . . . . . . . . 3
Cost . . . . . . . . . . . . . . . . . . . . . . . . 2
Date of contribution . . . . . . . . . . 2
Determining FMV . . . . . . . . . . . . 2
Opinions of experts . . . . . . . . . . 3
Problems in determining
FMV . . . . . . . . . . . . . . . . . . . . . . 3
Replacement cost . . . . . . . . . . . 3
Form 8283 . . . . . . . . . . . . . . . . . . . 11
Formulas, use in valuing
property . . . . . . . . . . . . . . . . . . . . 2
Free tax services . . . . . . . . . . . . 12
Future events, effect on
value . . . . . . . . . . . . . . . . . . . . . . . 4

H
Help (See Tax help)
Historic building . . . . . . . . . . . . . 8
Household goods . . . . . . . . . . 4, 9

I
Interest in a business . . . . . . . . 7
Inventory . . . . . . . . . . . . . . . . . . . . . 5
IRS review of appraisals . . . . . 11
Exception . . . . . . . . . . . . . . . . . . 11

M
Market conditions, effect on
value . . . . . . . . . . . . . . . . . . . . . . . 3
More information (See Tax help)

O
Opinions of experts . . . . . . . . . . 3

T
Tax help . . . . . . . . . . . . . . . . . . . . . 12
Taxpayer Advocate . . . . . . . . . . 12
TTY/TDD information . . . . . . . . 12

U
Used clothing . . . . . . . . . . . . . . 4, 9

P
Paintings . . . . . . . . . . . . . . . . . . . . . 4
Partial interest . . . . . . . . . . . . . . . 7
Past events, effect on
value . . . . . . . . . . . . . . . . . . . . . . . 4
Patents . . . . . . . . . . . . . . . . . . . . . . . 5
Penalties:
Imposed on appraiser . . . . . . 11
Imposed on taxpayer . . . . . . . 11
Publications (See Tax help)
Publicly traded securities . . . . 9

Q
Qualified appraisal . . . . . . . . . . . 9
Qualified appraiser . . . . . . . . . . 10
Qualified conservation
contribution . . . . . . . . . . . . . . . . 8

R
Real estate . . . . . . . . . . . . . . . . . . .
Remainder interests . . . . . . . . . .
Replacement cost . . . . . . . . . . . .
Reversion interests . . . . . . . . . .

6
7
3
7

V
Valuation of property . . . . . . . . .
Annuities . . . . . . . . . . . . . . . . . . .
Cars, boats, and aircraft . . . . .
Collections . . . . . . . . . . . . . . . . . .
Household goods . . . . . . . . . . .
Interest in a business . . . . . . . .
Inventory . . . . . . . . . . . . . . . . . . .
Jewelry and gems . . . . . . . . . . .
Life insurance and annuity
contracts . . . . . . . . . . . . . . . . .
Paintings, antiques, art
objects . . . . . . . . . . . . . . . . . . .
Partial interest in property . . . .
Patents . . . . . . . . . . . . . . . . . . . . .
Real estate . . . . . . . . . . . . . . . . .
Remainder interests . . . . . . . . .
Reversion interests . . . . . . . . . .
Stocks and bonds . . . . . . . . . . .
Terms of years . . . . . . . . . . . . . .
Used clothing . . . . . . . . . . . . . . .

4
7
5
5
4
7
5
4
7
4
7
5
6
7
7
5
7
4

■

Publication 561 (April 2007)

Page 15 of 15 of Publication 561

13:14 - 17-APR-2007

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Tax Publications for Individual Taxpayers
General Guides
1 Your Rights as a Taxpayer
17 Your Federal Income Tax (For
Individuals)
334 Tax Guide for Small Business (For
Individuals Who Use Schedule C or
C-EZ)
509 Tax Calendars for 2007
553 Highlights of 2006 Tax Changes
910 IRS Guide to Free Tax Services

Specialized Publications
3 Armed Forces’ Tax Guide
54 Tax Guide for U.S. Citizens and
Resident Aliens Abroad
225 Farmer’s Tax Guide
463 Travel, Entertainment, Gift, and Car
Expenses
501 Exemptions, Standard Deduction, and
Filing Information
502 Medical and Dental Expenses (Including
the Health Coverage Tax Credit)
503 Child and Dependent Care Expenses
504 Divorced or Separated Individuals
505 Tax Withholding and Estimated Tax
514 Foreign Tax Credit for Individuals
516 U.S. Government Civilian Employees
Stationed Abroad
517 Social Security and Other Information
for Members of the Clergy and
Religious Workers
519 U.S. Tax Guide for Aliens
521 Moving Expenses
523 Selling Your Home
524 Credit for the Elderly or the Disabled
525 Taxable and Nontaxable Income
526 Charitable Contributions
527 Residential Rental Property
529 Miscellaneous Deductions
530 Tax Information for First-Time
Homeowners

Commonly Used Tax Forms

531 Reporting Tip Income
536 Net Operating Losses (NOLs) for
Individuals, Estates, and Trusts
537 Installment Sales
541 Partnerships
544 Sales and Other Dispositions of Assets
547 Casualties, Disasters, and Thefts
550 Investment Income and Expenses
551 Basis of Assets
552 Recordkeeping for Individuals
554 Older Americans’ Tax Guide
555 Community Property
556 Examination of Returns, Appeal Rights,
and Claims for Refund
559 Survivors, Executors, and
Administrators
561 Determining the Value of Donated
Property
564 Mutual Fund Distributions
570 Tax Guide for Individuals With Income
From U.S. Possessions
571 Tax-Sheltered Annuity Plans (403(b)
Plans)
575 Pension and Annuity Income
584 Casualty, Disaster, and Theft Loss
Workbook (Personal-Use Property)
587 Business Use of Your Home (Including
Use by Daycare Providers)
590 Individual Retirement Arrangements
(IRAs)
593 Tax Highlights for U.S. Citizens and
Residents Going Abroad
594 What You Should Know About the IRS
Collection Process
596 Earned Income Credit (EIC)
721 Tax Guide to U.S. Civil Service
Retirement Benefits
901 U.S. Tax Treaties
907 Tax Highlights for Persons with
Disabilities

908 Bankruptcy Tax Guide
915 Social Security and Equivalent
Railroad Retirement Benefits
919 How Do I Adjust My Tax Withholding?
925 Passive Activity and At-Risk Rules
926 Household Employer’s Tax Guide
929 Tax Rules for Children and
Dependents
936 Home Mortgage Interest Deduction
946 How To Depreciate Property
947 Practice Before the IRS and
Power of Attorney
950 Introduction to Estate and Gift Taxes
967 The IRS Will Figure Your Tax
969 Health Savings Accounts and Other
Tax-Favored Health Plans
970 Tax Benefits for Education
971 Innocent Spouse Relief
972 Child Tax Credit
1542 Per Diem Rates
1544 Reporting Cash Payments of Over
$10,000 (Received in a Trade or
Business)
1546 The Taxpayer Advocate Service of the
IRS – How to Get Help With
Unresolved Tax Problems

Spanish Language Publications
1SP Derechos del Contribuyente
579SP Cómo Preparar la Declaración de
Impuesto Federal
594SP Que es lo que Debemos Saber sobre
el Proceso de Cobro del IRS
596SP Crédito por Ingreso del Trabajo
850 English-Spanish Glossary of Words
and Phrases Used in Publications
Issued by the Internal Revenue
Service
1544SP Informe de Pagos en Efectivo en
Exceso de $10,000 (Recibidos en
una Ocupación o Negocio)

See How To Get Tax Help for a variety of ways to get forms, including by computer, phone, and mail.

Form Number and Title
1040 U.S. Individual Income Tax Return
Sch A&B Itemized Deductions & Interest and
Ordinary Dividends
Profit or Loss From Business
Sch C
Sch C-EZ Net Profit From Business
Capital Gains and Losses
Sch D
Sch D-1
Continuation Sheet for Schedule D
Supplemental Income and Loss
Sch E
Earned Income Credit
Sch EIC
Profit or Loss From Farming
Sch F
Sch H
Household Employment Taxes
Sch J
Income Averaging for Farmers and Fishermen
Credit for the Elderly or the Disabled
Sch R
Self-Employment Tax
Sch SE
1040A U.S. Individual Income Tax Return
Interest and Ordinary Dividends for
Sch 1
Form 1040A Filers
Child and Dependent Care
Sch 2
Expenses for Form 1040A Filers
Credit for the Elderly or the
Sch 3
Disabled for Form 1040A Filers
1040EZ Income Tax Return for Single and
Joint Filers With No Dependents
1040-ES Estimated Tax for Individuals
Amended U.S. Individual Income Tax Return
1040X

Publication 561 (April 2007)

See How To Get Tax Help for a variety of ways to get publications, including
by computer, phone, and mail.

Form Number and Title
2106 Employee Business Expenses
2106-EZ Unreimbursed Employee Business
Expenses
2210 Underpayment of Estimated Tax by
Individuals, Estates, and Trusts
2441 Child and Dependent Care Expenses
2848 Power of Attorney and Declaration of
Representative
3903 Moving Expenses
4562 Depreciation and Amortization
4868 Application for Automatic Extension of Time
To File U.S. Individual Income Tax Return
4952 Investment Interest Expense Deduction
5329 Additional Taxes on Qualified Plans (Including
IRAs) and Other Tax-Favored Accounts
6251 Alternative Minimum Tax—Individuals
8283 Noncash Charitable Contributions
8582 Passive Activity Loss Limitations
8606 Nondeductible IRAs
8812 Additional Child Tax Credit
8822 Change of Address
8829 Expenses for Business Use of Your Home
8863 Education Credits
9465 Installment Agreement Request

Page 15



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