Publication 561 (Rev. April 2007) P561

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Publication 561 Contents

(Rev. April 2007)

Cat. No. 15109Q Introduction ..................... 1

Department

What Is Fair Market Value (FMV)? ..... 2of the

Treasury Determining Fair Market Value ...... 2

Determining Problems in Determining Fair

Internal Market Value ............... 3

Revenue

Service Valuation of Various Kinds of

the Value of Property .................... 4

Household Goods .............. 4

Donated Used Clothing ................. 4

Jewelry and Gems .............. 4

Paintings, Antiques, and Other

Property Objects of Art .............. 4

Collections ................... 5

Cars, Boats, and Aircraft .......... 5

Inventory .................... 5

Patents ..................... 5

Stocks and Bonds .............. 5

Real Estate ................... 6

Interest in a Business ............ 7

Annuities, Interests for Life or

Terms of Years, Remainders,

and Reversions ............. 7

Certain Life Insurance and

Annuity Contracts ............ 7

Partial Interest in Property Not

in Trust ................... 7

Appraisals ...................... 8

Deductions of More Than $5,000 .... 9

Deductions of More Than

$500,000 ................. 9

Qualified Appraisal .............. 9

Form 8283 ...................11

Internal Revenue Service Review

of Appraisals ............... 11

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 orga-

nizations. It also explains what kind of informa-

tion 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 charita-

ble contributions or written records and substan-

tiation 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

Internal Revenue Service

faster and easier by:

Individual Forms and Publications Branch

SE:W:CAR:MP:T:I

Internet •

www.irs.gov

1111 Constitution Ave. NW, IR-6406

Washington, DC 20224

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We respond to many letters by telephone. Factors. In making and supporting the valu- Cost or Selling Price of

Therefore, it would be helpful if you would in- ation of property, all factors affecting value are the Donated Property

clude your daytime phone number, including the relevant and must be considered. These in-

The cost of the property to you or the actual

area code, in your correspondence. clude:

selling price received by the qualified organiza-

You can email us at *taxforms@irs.gov. (The •The cost or selling price of the item, tion may be the best indication of its FMV. How-

asterisk must be included in the address.)

ever, because conditions in the market change,

•Sales of comparable properties,

Please put “Publications Comment” on the sub-

the cost or selling price of property may have

ject line. Although we cannot respond individu- •Replacement cost, and less weight if the property was not bought or sold

ally to each email, we do appreciate your

•Opinions of experts.

feedback and will consider your comments as reasonably close to the date of contribution.

we revise our tax products. The cost or selling price is a good indication

These factors are discussed later. Also, see of the property’s value if:

Ordering forms and publications. Visit Table 1 for a summary of questions to ask as

www.irs.gov/formspubs to download forms and •The purchase or sale took place close to

you consider each factor.

publications, call 1-800-829-3676, or write to the the valuation date in an open market,

address below and receive a response within 10 Date of contribution. Ordinarily, the date of a •The purchase or sale was at

business days after your request is received. contribution is the date that the transfer of the “arm’s-length,”

property takes place.

•The buyer and seller knew all relevant

National Distribution Center Stock. If you deliver, without any conditions, facts,

P.O. Box 8903 a properly endorsed stock certificate to a quali-

Bloomington, IL 61702 – 8903 •The buyer and seller did not have to act,

fied organization or to an agent of the organiza-

and

tion, the date of the contribution is the date of

delivery. If the certificate is mailed and received

Tax questions. If you have a tax question, •The market did not change between the

through the regular mail, it is the date of mailing.

visit www.irs.gov or call 1-800-829-1040. We date of purchase or sale and the valuation

If you deliver the certificate to a bank or broker

cannot answer tax questions sent to either of the date.

acting as your agent or to the issuing corporation

above addresses. or its agent, for transfer into the name of the

Example. Tom Morgan, who is not a dealer

organization, the date of the contribution is the

Useful Items in gems, bought an assortment of gems for

date the stock is transferred on the books of the

You may want to see: corporation. $5,000 from a promoter. The promoter claimed

that the price was “wholesale” even though he

Publication Options. If you grant an option to a qualified and other dealers made similar sales at similar

organization to buy real property, you have not

❏526 Charitable Contributions prices to other persons who were not dealers.

made a charitable contribution until the organi- The promoter said that if Tom kept the gems for

zation exercises the option. The amount of the

Form (and Instructions) more than 1 year and then gave them to charity,

contribution is the FMV of the property on the Tom could claim a charitable deduction of

❏8282 Donee Information Return date the option is exercised minus the exercise $15,000, which, according to the promoter,

price.

❏8283 Noncash Charitable Contributions would be the value of the gems at the time of

contribution. Tom gave the gems to a qualified

❏8283-V Payment Voucher for Filing Fee Example. You grant an option to a local charity 13 months after buying them.

Under Section 170(f)(13) university, which is a qualified organization, to

See How To Get Tax Help, near the end of The selling price for these gems had not

buy real property. Under the option, the univer-

this publication, for information about getting changed from the date of purchase to the date

sity could buy the property at any time during a

these publications and forms. he donated them to charity. The best evidence

2-year period for $40,000. The FMV of the prop-

of FMV depends on actual transactions and not

erty on the date the option is granted is $50,000.

on some artificial estimate. The $5,000 charged

In the following tax year, the university exer-

Tom and others is, therefore, the best evidence

cises the option. The FMV of the property on the

of the maximum FMV of the gems.

date the option is exercised is $55,000. There-

What Is Fair fore, you have made a charitable contribution of

Market Value (FMV)? $15,000 ($55,000, the FMV, minus $40,000, the Terms of the purchase or sale. The terms of

exercise price) in the tax year the option is exer- the purchase or sale should be considered in

To figure how much you may deduct for property cised. determining FMV if they influenced the price.

that you contribute, you must first determine its These terms include any restrictions, under-

fair market value on the date of the contribution. standings, or covenants limiting the use or dis-

Determining position of the property.

Fair market value. Fair market value (FMV) is Fair Market Value

the price that property would sell for on the open Rate of increase or decrease in value. Un-

Determining the value of donated property

market. It is the price that would be agreed on less you can show that there were unusual cir-

would be a simple matter if you could rely only

between a willing buyer and a willing seller, with cumstances, it is assumed that the increase or

on fixed formulas, rules, or methods. Usually it is

neither being required to act, and both having decrease in the value of your donated property

not that simple. Using such formulas, etc., sel-

reasonable knowledge of the relevant facts. If from your cost has been at a reasonable rate.

dom results in an acceptable determination of

you put a restriction on the use of property you For time adjustments, an appraiser may con-

FMV. There is no single formula that always

donate, the FMV must reflect that restriction. sider published price indexes for information on

applies when determining the value of property.

general price trends, building costs, commodity

This is not to say that a valuation is only

Example 1. If you give used clothing to the

costs, securities, and works of art sold at auction

guesswork. You must consider all the facts and

Salvation Army, the FMV would be the price that

in arm’s-length sales.

circumstances connected with the property,

typical buyers actually pay for clothing of this

such as its desirability, use, and scarcity.

age, condition, style, and use. Usually, such

Example. Bill Brown bought a painting for

For example, donated furniture should not be

items are worth far less than what you paid for

$10,000. Thirteen months later he gave it to an

evaluated at some fixed rate such as 15% of the

them.

art museum, claiming a charitable deduction of

cost of new replacement furniture. When the

$15,000 on his tax return. The appraisal of the

Example 2. If you donate land and restrict furniture is contributed, it may be out of style or

painting should include information showing that

its use to agricultural purposes, you must value in poor condition, therefore having little or no

there were unusual circumstances that justify a

the land at its value for agricultural purposes, market value. On the other hand, it may be an

50% increase in value for the 13 months Bill held

even though it would have a higher FMV if it antique, the value of which could not be deter-

the property.

were not restricted. mined by using any formula.

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Replacement CostTable 1. Factors That Affect FMV

The cost of buying, building, or manufacturing

IF the factor you are

property similar to the donated item should be

considering is... THEN you should ask these questions...

considered in determining FMV. However, there

must be a reasonable relationship between the

Was the purchase or sale of the property reasonably close to thecost or selling price replacement cost and the FMV.

date of contribution? The replacement cost is the amount it would

Was any increase or decrease in value, as compared to your cost, cost to replace the donated item on the valuation

at a reasonable rate? date. Often there is no relationship between the

Do the terms of purchase or sale limit what can be done with the replacement cost and the FMV. If the supply of

property? the donated property is more or less than the

Was there an arm’s-length offer to buy the property close to the demand for it, the replacement cost becomes

valuation date? less important.

To determine the replacement cost of the

How similar is the property sold to the property donated?sales of comparable donated property, find the “estimated replace-

properties How close is the date of sale to the valuation date? ment cost new.” Then subtract from this figure

Was the sale at arm’s-length? an amount for depreciation due to the physical

What was the condition of the market at the time of sale? condition and obsolescence of the donated

property. You should be able to show the rela-

tionship between the depreciated replacement

What would it cost to replace the donated property?replacement cost cost and the FMV, as well as how you arrived at

Is there a reasonable relationship between replacement cost and the “estimated replacement cost new.”

FMV?

Is the supply of the donated property more or less than the demand

for it? Opinions of Experts

Generally, the weight given to an expert’s opin-

Is the expert knowledgeable and competent?opinions of experts

ion on matters such as the authenticity of a coin

Is the opinion thorough and supported by facts and experience?

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

Arm’s-length offer. An arm’s-length offer to her that if she kept the Bibles for more than 1

the thoroughness with which the opinion is sup-

buy the property close to the valuation date may year and then gave them to a qualified organiza- ported by experience and facts. For an expert’s

help to prove its value if the person making the tion, she could claim a charitable deduction for opinion to deserve much weight, the facts must

offer was willing and able to complete the trans- the “retail” price of $30,000. Thirteen months support the opinion. For additional information,

action. To rely on an offer, you should be able to later she gave all the Bibles to a church that she see Appraisals, later.

show proof of the offer and the specific amount selected from a list provided by the promoter. At

to be paid. Offers to buy property other than the the time of her donation, wholesale dealers were

donated item will help to determine value if the Problems in Determining

selling similar quantities of Bibles to the general

other property is reasonably similar to the Fair Market Value

public for $10,000.

donated property.

There are a number of problems in determining

The FMV of the Bibles is $10,000, the price

the FMV of donated property.

at which similar quantities of Bibles were being

Sales of Comparable sold to others at the time of the contribution.

Properties

Unusual Market

Example 2. The facts are the same as in

The sales prices of properties similar to the Conditions

Example 1, except that the promoter gave Mary

donated property are often important in deter-

Black a second option. The promoter said that if

mining the FMV. The weight to be given to each The sale price of the property itself in an

Mary wanted a charitable deduction within 1

sale depends on the following. arm’s-length transaction in an open market is

year of the purchase, she could buy the 500 often the best evidence of its value. When you

•The degree of similarity between the prop- Bibles at the “retail” price of $30,000, paying rely on sales of comparable property, the sales

erty sold and the donated property. only $10,000 in cash and giving a promissory must have been made in an open market. If

•The time of the sale — whether it was note for the remaining $20,000. The principal those sales were made in a market that was

close to the valuation date. artificially supported or stimulated so as not to

and interest on the note would not be due for 12

be truly representative, the prices at which the

•The circumstances of the sale — whether it years. According to the promoter, Mary could

sales were made will not indicate the FMV.

was at arm’s-length with a knowledgeable then, within 1 year of the purchase, give the

buyer and seller, with neither having to For example, liquidation sale prices usually

Bibles to a qualified organization and claim the

act. do not indicate the FMV. Also, sales of stock

full $30,000 retail price as a charitable contribu- under unusual circumstances, such as sales of

tion. She purchased the Bibles under the sec-

•The conditions of the market in which the small lots, forced sales, and sales in a restricted

sale was made — whether unusually in- ond option and, 3 months later, gave them to a market, may not represent the FMV.

flated or deflated. church, which will use the books for church pur-

poses.

The comparable sales method of valuing real

estate is explained later under Valuation of Vari- Selection of

At the time of the gift, the promoter was

ous Kinds of Property. Comparable Sales

selling similar lots of Bibles for either $10,000 or

$30,000. The difference between the two prices Using sales of comparable property is an impor-

Example 1. Mary Black, who is not a book was solely at the discretion of the buyer. The tant method for determining the FMV of donated

dealer, paid a promoter $10,000 for 500 copies promoter was a willing seller for $10,000. There- property. However, the amount of weight given

of a single edition of a modern translation of the fore, the value of Mary’s contribution of the Bi- to a sale depends on the degree of similarity

Bible. The promoter had claimed that the price bles is $10,000, the amount at which similar lots between the comparable and the donated

was considerably less than the “retail” price, and

of Bibles could be purchased from the promoter properties. The degree of similarity must be

gave her a statement that the books had a total

close enough so that this selling price would

retail value of $30,000. The promoter advised by members of the general public.

Publication 561 (April 2007) Page 3

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have been given consideration by reasonably objects valued at $20,000 or more, a photo-

Household Goods graph of a size and quality fully showing the

well-informed buyers or sellers of the property.

object, preferably an 8 x 10 inch color photo-

The FMV of used household goods, such as

Example. You give a rare, old book to your graph or a color transparency no smaller than 4

furniture, appliances, and linens, is usually

former college. The book is a third edition and is x 5 inches, must be provided upon request.

much lower than the price paid when new. Such

in poor condition because of a missing back used property may have little or no market value Art valued at $50,000 or more. If you donate

cover. You discover that there was a sale for because of its worn condition. It may be out of an item of art that has been appraised at

$300, near the valuation date, of a first edition of style or no longer useful. $50,000 or more, you can request a Statement

the book that was in good condition. Although You cannot take a deduction for household of Value for that item from the IRS. You must

the contents are the same, the books are not at goods donated after August 17, 2006, unless request the statement before filing the tax return

all similar because of the different editions and they are in good used condition or better. A that reports the donation. Your request must

their physical condition. Little consideration household good that is not in good used condi- include the following.

would be given to the selling price of the $300 tion or better for which you take a deduction of

•A copy of a qualified appraisal of the item.

property by knowledgeable buyers or sellers. more than $500 requires a qualified appraisal. See Qualified Appraisal, later.

See Deduction over $500 for certain clothing or

household items, later. •A $2,500 check or money order payable to

Future Events If the property is valuable because it is old or the Internal Revenue Service for the user

unique, see the discussion under Paintings, An- fee that applies to your request regarding

You may not consider unexpected events hap- tiques, and Other Objects of Art.one, two, or three items of art. Add $250

pening after your donation of property in making for each item in excess of three.

the valuation. You may consider only the facts Used Clothing

known at the time of the gift, and those that •A completed Form 8283, Section B.

could be reasonably expected at the time of the Used clothing and other personal items are usu- •The location of the IRS territory that has

gift. ally worth far less than the price you paid for examination responsibility for your return.

them. Valuation of items of clothing does not

Example. You give farmland to a qualified If your request lacks essential information, you

lend itself to fixed formulas or methods.

charity. The transfer provides that your mother will be notified and given 30 days to provide the

The price that buyers of used items actually

will have the right to all income and full use of the missing information.

pay in used clothing stores, such as consign-

property for her life. Even though your mother Send your request to:

ment or thrift shops, is an indication of the value.

dies 1 week after the transfer, the value of the You cannot take a deduction for clothing

property on the date it is given is its present Internal Revenue Service

donated after August 17, 2006, unless it is in

value, subject to the life interest as estimated Attention: Art Appraisal (C:AP:ART)

good used condition or better. An item of cloth-

from actuarial tables. You may not take a higher P.O. Box 27720

ing that is not in good used condition or better for

deduction because the charity received full use McPherson Station

which you take a deduction of more than $500

and possession of the land only 1 week after the Washington, DC 20038

requires a qualified appraisal. See Deduction

transfer. over $500 for certain clothing or household

Refunds. You can withdraw your request

items, later.

for a Statement of Value at any time before it is

For valuable furs or very expensive gowns, a

Using Past Events to issued. However, the IRS will not refund the user

Form 8283 may have to be sent with your tax

Predict the Future fee if you do.

return. If the IRS declines to issue a Statement of

A common error is to rely too much on past Value in the interest of efficient tax administra-

events that do not fairly reflect the probable Jewelry and Gems tion, the IRS will refund the user fee.

future earnings and FMV.

Jewelry and gems are of such a specialized Authenticity. The authenticity of the donated

Example. You give all your rights in a suc- nature that it is almost always necessary to get art must be determined by the appraiser.

cessful patent to your favorite charity. Your rec- an appraisal by a specialized jewelry appraiser. Physical condition. Important items in the

ords show that before the valuation date there The appraisal should describe, among other valuation of antiques and art are physical condi-

were three stages in the patent’s history of earn- things, the style of the jewelry, the cut and set- tion and extent of restoration. These have a

ings. First, there was rapid growth in earnings ting of the gem, and whether it is now in fashion. significant effect on the value and must be fully

when the invention was introduced. Then, there If not in fashion, the possibility of having the reported in an appraisal. An antique in damaged

was a period of high earnings when the inven- property redesigned, recut, or reset should be condition, or lacking the “original brasses,” may

tion was being exploited. Finally, there was a reported in the appraisal. The stone’s coloring, be worth much less than a similar piece in excel-

decline in earnings when competing inventions weight, cut, brilliance, and flaws should be re- lent condition.

were introduced. The entire history of earnings ported and analyzed. Sentimental personal

may be relevant in estimating the future earn- value has no effect on FMV. But if the jewelry Art appraisers. More weight will usually be

ings. However, the appraiser must not rely too was owned by a famous person, its value might given to an appraisal prepared by an individual

much on the stage of rapid growth in earnings, increase. specializing in the kind and price range of the art

or of high earnings. The market conditions at being appraised. Certain art dealers or apprais-

those times do not represent the condition of the ers specialize, for example, in old masters, mod-

Paintings, Antiques,

market at the valuation date. What is most signif- ern art, bronze sculpture, etc. Their opinions on

and Other Objects of Art

icant is the trend of decline in earnings up to the the authenticity and desirability of such art would

valuation date. For more information about do- usually be given more weight than the opinions

Your deduction for contributions of paintings,

nations of patents, see Patents, later. of more generalized art dealers or appraisers.

antiques, and other objects of art, should be

They can report more recent comparable sales

supported by a written appraisal from a qualified

to support their opinion.

and reputable source, unless the deduction is

To identify and locate experts on unique,

$5,000 or less. Examples of information that

specialized items or collections, you may wish to

Valuation of Various should be included in appraisals of art objects —

use the current Official Museum Directory of the

paintings in particular — are found later under

Kinds of Property American Association of Museums. It lists mu-

Qualified Appraisal.

seums both by state and by category.

This section contains information on determin- Art valued at $20,000 or more. If you claim a To help you locate a qualified appraiser for

ing the FMV of ordinary kinds of donated prop- deduction of $20,000 or more for donations of your donation, you may wish to ask an art histo-

erty. For information on appraisals, see art, you must attach a complete copy of the rian at a nearby college or the director or curator

Appraisals, later. signed appraisal to your return. For individual of a local museum. The Yellow Pages often list

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specialized art and antique dealers, auction- Americana, foreign imports, Bibles, and scien- dealer retail value, of a similar vehicle. However,

eers, and art appraisers. You may be able to find tific books. the FMV may be less than that amount if the

a qualified appraiser on the Internet. You may vehicle has engine trouble, body damage, high

Modest value of collection. If the collec-

also contact associations of dealers for gui- mileage, or any type of excessive wear. The

tion you are donating is of modest value, not

dance. FMV of a donated vehicle is the same as the

requiring a written appraisal, the following infor- price listed in a used vehicle pricing guide for a

mation may help you in determining the FMV. private party sale only if the guide lists a sales

Collections A book that is very old, or very rare, is not price for a vehicle that is the same make, model,

necessarily valuable. There are many books and year, sold in the same area, in the same

Since many kinds of hobby collections may be that are very old or rare, but that have little or no condition, with the same or similar options or

the subject of a charitable donation, it is not market value. accessories, and with the same or similar war-

possible to discuss all of the possible col-

Condition of book. The condition of a book ranties as the donated vehicle.

lectibles in this publication. Most common are

may have a great influence on its value. Collec-

rare books, autographs, sports memorabilia,

Example. You donate a used car in poor

tors are interested in items that are in fine, or at

dolls, manuscripts, stamps, coins, guns, phono-

condition to a local high school for use by stu-

least good, condition. When a book has a miss-

graph records, and natural history items. Many

dents studying car repair. A used car guide

ing page, a loose binding, tears, stains, or is

of the elements of valuation that apply to paint-

shows the dealer retail value for this type of car

otherwise in poor condition, its value is greatly

ings and other objects of art, discussed earlier,

in poor condition is $1,600. However, the guide

lowered.

also apply to miscellaneous collections.

shows the price for a private party sale of the car

Other factors. Some other factors in the

Reference material. Publications available to is only $750. The FMV of the car is considered to

valuation of a book are the kind of binding

help you determine the value of many kinds of be no more than $750.

(leather, cloth, paper), page edges, and illustra-

collections include catalogs, dealers’ price lists,

tions (drawings and photographs). Collectors

and specialized hobby periodicals. When using Boats. Except for inexpensive small boats,

usually want first editions of books. However,

one of these price guides, you must use the the valuation of boats should be based on an

because of changes or additions, other editions

current edition at the date of contribution. How- appraisal by a marine surveyor because the

are sometimes worth as much as, or more than,

ever, these sources are not always reliable in- physical condition is so critical to the value.

the first edition.

dicators of FMV and should be supported by

More information. Your deduction for a

other evidence. Manuscripts, autographs, diaries, and simi- donated car, boat, or airplane generally is lim-

For example, a dealer may sell an item for lar items. When these items are handwritten, ited to the gross proceeds from its sale by the

much less than is shown on a price list, particu- or at least signed by famous people, they are qualified organization. This rule applies if the

larly after the item has remained unsold for a often in demand and are valuable. The writings claimed value of the donated vehicle is more

long time. The price an item sold for in an auc- of unknowns also may be of value if they are of than $500. In certain cases, you can deduct the

tion may have been the result of a rigged sale or unusual historical or literary importance. Deter- vehicle’s FMV. For details, see Publication 526.

a mere bidding duel. The appraiser must ana- mining the value of such material is difficult. For

lyze the reference material, and recognize and example, there may be a great difference in

make adjustments for misleading entries. If you Inventory

value between two diaries that were kept by a

are donating a valuable collection, you should famous person — one kept during childhood and

get an appraisal. If your donation appears to be If you donate any inventory item to a charitable

the other during a later period in his or her life.

of little value, you may be able to make a satis- organization, the amount of your deductible con-

The appraiser determines a value in these

factory valuation using reference materials tribution generally is the FMV of the item, minus

cases by applying knowledge and judgment to

available at a state, city, college, or museum any gain you would have realized if you had sold

such factors as comparable sales and condi-

library. the item at its FMV on the date of the gift. For

tions. more information, see Publication 526.

Stamp collections. Most libraries have cata-

Signatures. Signatures, or sets of signatures,

logs or other books that report the publisher’s Patents

that were cut from letters or other papers usually

estimate of values. Generally, two price levels

have little or no value. But complete sets of the

are shown for each stamp: the price postmarked To determine the FMV of a patent, you must

signatures of U.S. presidents are in demand.

and the price not postmarked. Stamp dealers take into account, among other factors:

generally know the value of their merchandise

and are able to prepare satisfactory appraisals •Whether the patented technology has

Cars, Boats, and Aircraft

of valuable collections. been made obsolete by other technology;

If you donate a car, a boat, or an aircraft to a

Coin collections. Many catalogs and other •Any restrictions on the donee’s use of, or

charitable organization, its FMV must be deter-

reference materials show the writer’s or pub- ability to transfer, the patented technology;

mined.

lisher’s opinion of the value of coins on or near and

Certain commercial firms and trade organi-

the date of the publication. Like many other zations publish monthly or seasonal guides for •The length of time remaining before the

collectors’ items, the value of a coin depends on different regions of the country, containing com- patent expires.

the demand for it, its age, and its rarity. Another plete dealer sale prices or dealer average prices

important factor is the coin’s condition. For ex- for recent model years. Prices are reported for However, your deduction for a donation of a

ample, there is a great difference in the value of each make, model, and year. These guides also patent or other intellectual property is its FMV,

a coin that is in mint condition and a similar coin provide estimates for adjusting for unusual minus any gain you would have realized if you

that is only in good condition. equipment, unusual mileage, and physical con- had sold the property at its FMV on the date of

Catalogs usually establish a category for dition. The prices are not “official,” and these the gift. Generally, this means your deduction is

coins, based on their physical condition — mint publications are not considered an appraisal of the lesser of the property’s FMV or its basis. For

or uncirculated, extremely fine, very fine, fine, any specific donated property. But they do pro- details, see Publication 526.

very good, good, fair, or poor — with a different vide clues for making an appraisal and suggest

valuation for each category. relative prices for comparison with current sales Stocks and Bonds

Books. The value of books is usually deter- and offerings in your area.

mined by selecting comparable sales and ad- These publications are sometimes available The value of stocks and bonds is the FMV of a

justing the prices according to the differences from public libraries or at a bank, credit union, or share or bond on the valuation date. See Date of

between the comparable sales and the item finance company. You can also find pricing in- contribution, earlier, under What Is Fair Market

being evaluated. This is difficult to do and, ex- formation about used cars on the Internet. Value (FMV).

cept for a collection of little value, should be An acceptable measure of the FMV of a

done by a specialized appraiser. Within the gen- donated car, boat, or airplane is an amount not Selling prices on valuation date. If there is

eral category of literary property, there are deal- in excess of the price listed in a used vehicle an active market for the contributed stocks or

ers who specialize in certain areas, such as pricing guide for a private party sale, not the bonds on a stock exchange, in an

Publication 561 (April 2007) Page 5

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Prices only before or after valuation date, but

over-the-counter market, or elsewhere, the FMV Real Estate

not both. If no selling prices or bona fide bid

of each share or bond is the average price be-

and asked prices are available on a date within a

tween the highest and lowest quoted selling Because each piece of real estate is unique and

reasonable period before the valuation date, but

prices on the valuation date. For example, if the its valuation is complicated, a detailed appraisal

are available on a date within a reasonable pe-

highest selling price for a share was $11, and by a professional appraiser is necessary.

riod after the valuation date, or vice versa, then

the lowest $9, the average price is $10. You get The appraiser must be thoroughly trained in

the average price between the highest and low-

the average price by adding $11 and $9 and the application of appraisal principles and the-

est of such available prices may be treated as

dividing the sum by 2. ory. In some instances the opinions of equally

the value. qualified appraisers may carry unequal weight,

No sales on valuation date. If there were

such as when one appraiser has a better knowl-

no sales on the valuation date, but there were Large blocks of stock. When a large block of edge of local conditions.

sales within a reasonable period before and stock is put on the market, it may lower the

after the valuation date, you determine FMV by The appraisal report must contain a com-

selling price of the stock if the supply is greater

taking the average price between the highest plete description of the property, such as street

than the demand. On the other hand, market

and lowest sales prices on the nearest date address, legal description, and lot and block

forces may exist that will afford higher prices for

before and on the nearest date after the valua- number, as well as physical features, condition,

large blocks of stock. Because of the many fac-

tion date. Then you weight these averages in and dimensions. The use to which the property

tors to be considered, determining the value of

inverse order by the respective number of trad- is put, zoning and permitted uses, and its poten-

large blocks of stock usually requires the help of

ing days between the selling dates and the valu- tial use for other higher and better uses are also

experts specializing in underwriting large quanti-

ation date. relevant.

ties of securities, or in trading in the securities of

the industry of which the particular company is a

Example. On the day you gave stock to a In general, there are three main approaches

part.

qualified organization, there were no sales of the to the valuation of real estate. An appraisal may

stock. Sales of the stock nearest the valuation require the combined use of two or three meth-

Unavailable prices or closely held corpora-

date took place two trading days before the ods rather than one method only.

tion. If selling prices or bid and asked prices

valuation date at an average selling price of $10 are not available, or if securities of a closely held

and three trading days after the valuation date at corporation are involved, determine the FMV by 1. Comparable Sales

an average selling price of $15. The FMV on the considering the following factors.

valuation date was $12, figured as follows: The comparable sales method compares the

•For bonds, the soundness of the security, donated property with several similar properties

[(3 x $10) + (2 x $15)] ÷5 = $12 the interest yield, the date of maturity, and that have been sold. The selling prices, after

other relevant factors. adjustments for differences in date of sale, size,

Listings on more than one stock ex-

•For shares of stock, the company’s net condition, and location, would then indicate the

change. Stocks or bonds listed on more than

worth, prospective earning power and divi- estimated FMV of the donated property.

one stock exchange are valued based on the

dend-paying capacity, and other relevant

prices of the exchange on which they are princi- If the comparable sales method is used to

factors.

pally dealt. This applies if these prices are pub- determine the value of unimproved real property

lished in a generally available listing or (land without significant buildings, structures, or

Other factors. Other relevant factors in-

publication of general circulation. If this is not any other improvements that add to its value),

clude:

applicable, and the stocks or bonds are reported the appraiser should consider the following fac-

on a composite listing of combined exchanges in tors when comparing the potential comparable

•The nature and history of the business,

a publication of general circulation, use the com- property and the donated property:

especially its recent history,

posite list. See also Unavailable prices or •Location, size, and zoning or use restric-

•The goodwill of the business,

closely held corporation, later. tions,

•The economic outlook in the particular in-

Bid and asked prices on valuation date. If •Accessibility and road frontage, and avail-

dustry,

there were no sales within a reasonable period able utilities and water rights,

•The company’s position in the industry, its

before and after the valuation date, the FMV is

•Riparian rights (right of access to and use

competitors, and its management, and

the average price between the bona fide bid and of the water by owners of land on the bank

asked prices on the valuation date. •The value of securities of corporations en- of a river) and existing easements,

gaged in the same or similar business. rights-of-way, leases, etc.,

Example. Although there were no sales of

For preferred stock, the most important factors

Blue Corporation stock on the valuation date, •Soil characteristics, vegetative cover, and

are its yield, dividend coverage, and protection

bona fide bid and asked prices were available on status of mineral rights, and

of its liquidation preference.

that date of $14 and $16, respectively. The FMV

•Other factors affecting value.

is $15, the average price between the bid and You should keep complete financial and other

asked prices. information on which the valuation is based. For each comparable sale, the appraisal must

This includes copies of reports of examinations

No prices on valuation date. If there were include the names of the buyer and seller, the

of the company made by accountants, engi-

no prices available on the valuation date, you deed book and page number, the date of sale

neers, or any technical experts on or close to the

determine FMV by taking the average prices and selling price, a property description, the

valuation date.

between the bona fide bid and asked prices on amount and terms of mortgages, property

the closest trading date before and after the surveys, the assessed value, the tax rate, and

Restricted securities. Some classes of stock

valuation date. Both dates must be within a the assessor’s appraised FMV.

cannot be traded publicly because of restrictions

reasonable period. Then you weight these aver- The comparable selling prices must be ad-

imposed by the Securities and Exchange Com-

ages in inverse order by the respective number justed to account for differences between the

mission, or by the corporate charter or a trust

of trading days between the bid and asked dates sale property and the donated property. Be-

agreement. These restricted securities usually

and the valuation date. cause differences of opinion may arise between

trade at a discount in relation to freely traded appraisers as to the degree of comparability and

securities.

Example. On the day you gave stock to a the amount of the adjustment considered neces-

To arrive at the FMV of restricted securities,

qualified organization, no prices were available. sary for comparison purposes, an appraiser

factors that you must consider include the resale

Bona fide bid and asked prices 3 days before the should document each item of adjustment.

provisions found in the restriction agreements,

valuation date were $10 and 2 days after the

the relative negotiating strengths of the buyer Only comparable sales having the least ad-

valuation date were $15. The FMV on the valua-

and seller, and the market experience of freely justments in terms of items and/or total dollar

tion date is $13, figured as follows:

traded securities of the same class as the re- adjustments should be considered as compara-

[(2 x $10) + (3 x $15)] ÷5 = $13 stricted securities. ble to the donated property.

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For information on the circumstances under

2. Capitalization of Income Annuities, Interests for which a charitable deduction may be allowed for

Life or Terms of

This method capitalizes the net income from the the donation of a partial interest in property not

Years, Remainders, and

property at a rate that represents a fair return on in trust, see Partial Interest in Property Not in

the particular investment at the particular time, Reversions Trust, later.

considering the risks involved. The key ele-

The value of these kinds of property is their

ments are the determination of the income to be Certain Life Insurance

present value, except in the case of annuities

capitalized and the rate of capitalization. and Annuity Contracts

under contracts issued by companies regularly

engaged in their sale. The valuation of these The value of an annuity contract or a life insur-

commercial annuity contracts and of insurance

3. Replacement Cost New or ance policy issued by a company regularly en-

policies is discussed later under Certain Life

Reproduction Cost Minus gaged in the sale of such contracts or policies is

Insurance and Annuity Contracts.

Observed Depreciation the amount that company would charge for a

To determine present value, you must know

comparable contract.

the applicable interest rate and use actuarial

This method, used alone, usually does not result

tables. But if the donee of a life insurance policy may

in a determination of FMV. Instead, it generally

reasonably be expected to cash the policy rather

tends to set the upper limit of value, particularly Interest rate. The applicable interest rate var- than hold it as an investment, then the FMV is

in periods of rising costs, because it is reasona- ies. It is announced monthly in a news release the cash surrender value rather than the re-

ble to assume that an informed buyer will not and published in the Internal Revenue Bulletin placement cost.

pay more for the real estate than it would cost to as a Revenue Ruling. The interest rate to use is

reproduce a similar property. Of course, this If an annuity is payable under a combination

under the heading “Rate Under Section 7520”

reasoning does not apply if a similar property annuity contract and life insurance policy (for

for a given month and year. You can call the IRS

cannot be created because of location, unusual example, a retirement income policy with a

office at 1-800-829-1040 to obtain this rate.

construction, or some other reason. Generally, death benefit) and there was no insurance ele-

this method serves to support the value deter- ment when it was transferred to the charity, the

Actuarial tables. You need to refer to actua-

policy is treated as an annuity contract.

mined from other methods. When the replace- rial tables to determine a qualified interest in the

ment cost method is applied to improved realty, form of an annuity, any interest for life or a term

the land and improvements are valued sepa- of years, or any remainder interest to a charita- Partial Interest

ble organization.

rately. in Property Not in Trust

Use the valuation tables set forth in IRS

The replacement cost of a building is figured Publications 1457, Actuarial Values (Book

by considering the materials, the quality of work- Generally, no deduction is allowed for a charita-

Aleph), and 1458, Actuarial Values (Book Beth).

manship, and the number of square feet or cubic ble contribution, not made in trust, of less than

Both of these publications provide tables con-

feet in the building. This cost represents the total your entire interest in property. However, this

taining actuarial factors to be used in determin-

cost of labor and material, overhead, and profit. does not apply to a transfer of less than your

ing the present value of an annuity, an interest

After the replacement cost has been figured, entire interest if it is a transfer of:

for life or for a term of years, or a remainder or

consideration must be given to the following •A remainder interest in your personal resi-

reversionary interest. For qualified charitable

factors: dence or farm,

transfers, you can use the factor for the month in

•Physical deterioration — the wear and tear which you made the contribution or for either of •An undivided part of your entire interest in

on the building itself, the 2 months preceding that month. property, or

Publication 1457 also contains actuarial fac-

•Functional obsolescence — usually in older •A qualified conservation contribution.

tors for computing the value of a remainder

buildings with, for example, inadequate interest in a charitable remainder annuity trust

lighting, plumbing, or heating, small and a pooled income fund. Publication 1458 Remainder Interest in Real

rooms, or a poor floor plan, and contains the factors for valuing the remainder Property

interest in a charitable remainder unitrust. You

•Economic obsolescence — outside forces

can download Publications 1457 and 1458 from

causing the whole area to become less The amount of the deduction for a donation of a

www.irs.gov. In addition, they are available for

desirable. remainder interest in real property is the FMV of

purchase via the website of the U. S. Govern- the remainder interest at the time of the contribu-

ment Printing Office, by phone at (202) tion. To determine this value, you must know the

Interest in a Business 512-1800, or by mail from the: FMV of the property on the date of the contribu-

Superintendent of Documents tion. Multiply this value by the appropriate factor.

The FMV of any interest in a business, whether

P.O. Box 371954 Publications 1457 and 1458 contain these fac-

a sole proprietorship or a partnership, is the Pittsburgh, PA 15250-7954 tors.

amount that a willing buyer would pay for the

You must make an adjustment for deprecia-

interest to a willing seller after consideration of

tion or depletion using the factors shown in Pub-

all relevant factors. The relevant factors to be Tables containing actuarial factors for transfers

lication 1459, Actuarial Values (Book Gimel).

considered in valuing the business are: to pooled income funds may also be found in

Income Tax Regulation 1.642(c)-6(e)(6), You can use the factors for the month in which

•The FMV of the assets of the business, transfers to charitable remainder unitrusts in you made the contribution or for either of the two

•The demonstrated earnings capacity of Regulation 1.664-4(e), and other transfers in months preceding that month. See the earlier

Regulation 20.2031-7(d)(6).

the business, based on a review of past discussion on Annuities, Interests for Life or

and current earnings, and Terms of Years, Remainders, and Reversions.

Special factors. If you need a special factor You can download Publication 1459 from

•The other factors used in evaluating cor- for an actual transaction, you can request a www.irs.gov.

porate stock, if they apply. letter ruling. Be sure to include the date of birth For this purpose, the term “depreciable prop-

of each person the duration of whose life may erty” means any property subject to wear and

The value of the goodwill of the business affect the value of the interest. Also include tear or obsolescence, even if not used in a trade

should also be taken into consideration. You copies of the relevant instruments. IRS charges or business or for the production of income.

should keep complete financial and other infor- a user fee for providing special factors.

If the remainder interest includes both depre-

mation on which you base the valuation. This For more information about requesting a rul-

ciable and nondepreciable property, for exam-

includes copies of reports of examinations of the ing, see Revenue Procedure 2006-1 (or annual

ple a house and land, the FMV must be

business made by accountants, engineers, or update), 2006-1 I.R.B. 1. Revenue Procedure

allocated between each kind of property at the

any technical experts on or close to the valuation 2006-1 is available at

time of the contribution. This rule also applies to

date. www.irs.gov/irb/2006-01_IRB/ar06.html.

Publication 561 (April 2007) Page 7

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a gift of a remainder interest that includes prop- must be some visual public access to the that have comparable restrictions. If there are no

erty that is part depletable and part not deplet- property. Factors used in determining the comparable sales, the restrictions are valued

able. Take into account depreciation or type and amount of public access required indirectly as the difference between the FMVs of

depletion only for the property that is subject to include the historical significance of the the property involved before and after the grant

depreciation or depletion. property, the remoteness or accessibility of the restriction.

For more information, see section 1.170A-12 of the site, and the extent to which intru- The FMV of the property before contribution

of the Income Tax Regulations. sions on the privacy of individuals living on of the restriction should take into account not

the property would be unreasonable. only current use but the likelihood that the prop-

erty, without the restriction, would be developed.

Undivided Part of Your Entire You should also consider any zoning, conserva-

Building in registered historic district. A

Interest tion, or historical preservation laws that would

contribution after July 25, 2006, of a qualified restrict development. Granting an easement

real property interest that is an easement or

A contribution of an undivided part of your entire may increase, rather than reduce, the value of

other restriction on the exterior of a building in a

interest in property must consist of a part of each property, and in such a situation no deduction

registered historic district is deductible only if it

and every substantial interest or right you own in would be allowed.

meets all of the following three conditions.

the property. It must extend over the entire term

Example. You own 10 acres of farmland.

of your interest in the property. For example, you 1. The restriction must preserve the entire ex- Similar land in the area has an FMV of $2,000 an

are entitled to the income from certain property terior of the building and must prohibit any acre. However, land in the general area that is

for your life (life estate) and you contribute 20% change to the exterior of the building that restricted solely to farm use has an FMV of

of that life estate to a qualified organization. You is inconsistent with its historical character. $1,500 an acre. Your county wants to preserve

can claim a deduction for the contribution if you

open space and prevent further development in

2. You and the organization receiving the

do not have any other interest in the property. To

your area.

contribution must enter into a written

figure the value of a contribution involving a

agreement certifying, that the organization

partial interest, see Publication 1457. You grant to the county an enforceable open

is a qualified organization and that it has

If the only interest you own in real property is space easement in perpetuity on 8 of the 10

the resources and commitment to maintain

a remainder interest and you transfer part of that acres, restricting its use to farmland. The value

the property as donated.

interest to a qualified organization, see the pre- of this easement is $4,000, determined as fol-

vious discussion on valuation of a remainder lows:

3. If you make the contribution in a tax year

interest in real property. beginning after August 17, 2006, you must FMV of the property before

include with your return: granting easement:

$2,000 × 10 acres ............ $20,000

Qualified Conservation a. A qualified appraisal, FMV of the property after

Contribution b. Photographs of the building’s entire ex- granting easement:

terior, and $1,500 × 8 acres ...... $12,000

A qualified conservation contribution is a contri-

$2,000 × 2 acres ...... 4,000 16,000

bution of a qualified real property interest to a c. A description of all restrictions on devel-

qualified organization to be used only for con- opment of the building, such as zoning Value of easement ...... $4,000

servation purposes. laws and restrictive covenants. If you later transfer in fee your remaining

Qualified organization. For purposes of a interest in the 8 acres to another qualified organ-

If you make this type of contribution after

qualified conservation contribution, a qualified ization, the FMV of your remaining interest is the

February 12, 2007, and claim a deduction of

organization is: FMV of the 8 acres reduced by the FMV of the

more than $10,000, your deduction will not be easement granted to the first organization.

•A governmental unit, allowed unless you pay a $500 filing fee. See

Form 8283-V, Payment Voucher for Filing Fee

•A publicly supported charitable, religious, More information. For more information

Under Section 170(f)(13), and its instructions.

scientific, literary, educational, etc., organi- about qualified conservation contributions, see

zation, or Publication 526.

Qualified real property interest. This is any

•An organization that is controlled by, and of the following interests in real property.

operated for the exclusive benefit of, a

1. Your entire interest in real estate other

governmental unit or a publicly supported

than a mineral interest (subsurface oil,

charity. Appraisals

gas, or other minerals, and the right of

The organization also must have a commitment access to these minerals). Appraisals are not necessary for items of prop-

to protect the conservation purposes of the do- erty for which you claim a deduction of $5,000 or

2. A remainder interest.

nation and must have the resources to enforce less. (There is one exception, described next,

the restrictions. 3. A restriction (granted in perpetuity) on the for certain clothing and household items.) How-

use that may be made of the real property. ever, you generally will need an appraisal for

Conservation purposes. Your contribution donated property for which you claim a deduc-

must be made only for one of the following tion of more than $5,000. There are exceptions.

Valuation. A qualified real property interest

conservation purposes. See Deductions of More Than $5,000, later.

described in (1) should be valued in a manner

•Preserving land areas for outdoor recrea- The weight given an appraisal depends on

that is consistent with the type of interest trans-

tion by, or for the education of, the general the completeness of the report, the qualifica-

ferred. If you transferred all the interest in the

public. tions of the appraiser, and the appraiser’s

property, the FMV of the property is the amount

demonstrated knowledge of the donated prop-

of the contribution. If you do not transfer the

•Protecting a relatively natural habitat of erty. An appraisal must give all the facts on

mineral interest, the FMV of the surface rights in

fish, wildlife, or plants, or a similar ecosys- which to base an intelligent judgment of the

the property is the amount of the contribution.

tem. value of the property.

If you owned only a remainder interest or an

•Preserving open space, including farmland income interest (life estate), see Undivided Part The appraisal will not be given much weight

and forest land, if it yields a significant of Your Entire Interest, earlier. If you owned the if:

public benefit. It must be either for the entire property but transferred only a remainder •All the factors that apply are not consid-

scenic enjoyment of the general public or interest (item (2)), see Remainder Interest in ered,

under a clearly defined federal, state, or Real Property, earlier.

local governmental conservation policy. •The opinion is not supported with facts,

In determining the value of restrictions, you

such as purchase price and comparable

•Preserving a historically important land should take into account the selling price in

sales, or

area or a certified historic structure. There arm’s-length transactions of other properties

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•The opinion is not consistent with known 170(e)(3)(A) of the Internal Revenue that broker or dealer is not an interdealer quota-

facts. tion system.

Code, or

The average trading price is the average

•Stock in trade, inventory, or property held

The appraiser’s opinion is never more valid price of all transactions (weighted by volume),

primarily for sale to customers in the ordi-

than the facts on which it is based; without these other than original issue or redemption transac-

nary course of your trade or business.

facts it is simply a guess. tions, conducted through a United States office

The opinion of a person claiming to be an of a broker or dealer who maintains a market in

Although an appraisal is not required for the

expert is not binding on the Internal Revenue the issue of the security during the computation

types of property just listed, you must provide

Service. All facts associated with the donation period. Bid and asked quotations are not taken

certain information about a donation of any of

must be considered. into account.

these types of property on Form 8283. The computation period is weekly during Oc-

Deduction over $500 for certain clothing or Publicly traded securities. Even if your tober through December and monthly during

household items. You must include with your claimed deduction is more than $5,000, neither January through September. The weekly com-

return a qualified appraisal of any single item of a qualified appraisal nor Section B of Form 8283 putation periods during October through De-

clothing or any household item that is not in is required for publicly traded securities that are: cember begin with the first Monday in October

good used condition or better, that you donated and end with the first Sunday following the last

after August 17, 2006, and for which you deduct •Listed on a stock exchange in which quo- Monday in December.

more than $500. See Household Goods and tations are published on a daily basis,

Used Clothing, earlier. Nonpublicly traded stock. If you contrib-

•Regularly traded in a national or regional ute nonpublicly traded stock, for which you claim

over-the-counter market for which pub-

Cost of appraisals. You may not take a chari- a deduction of $10,000 or less, a qualified ap-

lished quotations are available, or

table contribution deduction for fees you pay for praisal is not required. However, you must at-

appraisals of your donated property. However, •Shares of an open-end investment com- tach Form 8283 to your tax return, with Section

these fees may qualify as a miscellaneous de- B, Parts I and IV, completed.

pany (mutual fund) for which quotations

duction, subject to the 2% limit, on Schedule A are published on a daily basis in a news-

(Form 1040) if paid to determine the amount paper of general circulation throughout the Deductions of More Than

allowable as a charitable contribution. United States. $500,000

Publicly traded securities that meet these re-

Deductions of More If you claim a deduction of more than $500,000

quirements must be reported on Form 8283,

Than $5,000 for a donation of property, you must attach a

Section A. qualified appraisal of the property to your return.

Generally, if the claimed deduction for an item or A qualified appraisal is not required, but Form This does not apply to contributions of cash,

group of similar items of donated property is 8283, Section B, Parts I and IV, must be com- inventory, publicly traded stock, or intellectual

more than $5,000, you must get a qualified ap- pleted, for an issue of a security that does not property.

praisal made by a qualified appraiser, and you meet the requirements just listed but does meet If you do not attach the appraisal, you cannot

must attach Section B of Form 8283 to your tax these requirements: deduct your contribution, unless your failure to

return. There are exceptions, discussed later. attach the appraisal is due to reasonable cause

You should keep the appraiser’s report with your 1. The issue is regularly traded during the and not to willful neglect.

written records. Records are discussed in Publi- computation period (defined later) in a

cation 526. market for which there is an “interdealer Qualified Appraisal

The phrase “similar items” means property of quotation system” (defined later),

the same generic category or type (whether or Generally, if the claimed deduction for an item or

2. The issuer or agent computes the “aver-

not donated to the same donee), such as stamp group of similar items of donated property is

age trading price” (defined later) for the

collections, coin collections, lithographs, paint- more than $5,000, you must get a qualified ap-

same issue for the computation period,

ings, photographs, books, nonpublicly traded praisal made by a qualified appraiser. You must

stock, nonpublicly traded securities other than 3. The average trading price and total volume also complete Form 8283, Section B, and attach

nonpublicly traded stock, land, buildings, cloth- of the issue during the computation period it to your tax return. See Deductions of More

ing, jewelry, furniture, electronic equipment, are published in a newspaper of general Than $5,000, earlier.

household appliances, toys, everyday kitchen- circulation throughout the United States, A qualified appraisal is an appraisal docu-

ware, china, crystal, or silver. For example, if not later than the last day of the month ment that:

you give books to three schools and you deduct following the end of the calendar quarter in

$2,000, $2,500, and $900, respectively, your •Is made, signed, and dated by a qualified

which the computation period ends,

claimed deduction is more than $5,000 for these appraiser (defined later) in accordance

4. The issuer or agent keeps books and rec-

books. You must get a qualified appraisal of the with generally accepted appraisal stan-

ords that list for each transaction during

books and for each school you must attach a dards,

the computation period the date of settle-

fully completed Form 8283, Section B, to your

•Meets the relevant requirements of Regu-

ment of the transaction, the name and ad-

tax return. lations section 1.170A-13(c)(3) and Notice

dress of the broker or dealer making the

Exceptions. You do not need an appraisal if 2006-96, 2006-46 I.R.B. 902 (available at

market in which the transaction occurred,

the property is: www.irs.gov/irb/2006-46_IRB/ar13.html),

and the trading price and volume, and

•Nonpublicly traded stock of $10,000 or •Relates to an appraisal made not earlier

5. The issuer or agent permits the Internal

less, than 60 days before the date of contribu-

Revenue Service to review the books and tion of the appraised property,

records described in item (4) with respect

•A vehicle (including a car, boat, or air- to transactions during the computation pe-

plane) for which your deduction is limited •Does not involve a prohibited appraisal

riod upon receiving reasonable notice.

to the gross proceeds from its sale, fee, and

An interdealer quotation system is any sys-

•Qualified intellectual property, such as a •Includes certain information (covered

tem of general circulation to brokers and dealers

patent, later).

that regularly disseminates quotations of obliga-

•Certain publicly traded securities de- tions by two or more identified brokers or dealers You must receive the qualified appraisal

scribed next, who are not related to either the issuer or agent before the due date, including extensions, of the

who computes the average trading price of the

•Inventory and other property donated by a return on which a charitable contribution deduc-

security. A quotation sheet prepared and distrib-

corporation that are “qualified contribu- tion is first claimed for the donated property. If

uted by a broker or dealer in the regular course

tions” for the care of the ill, the needy, or the deduction is first claimed on an amended

infants, within the meaning of section of business and containing only quotations of return, the qualified appraisal must be received

Publication 561 (April 2007) Page 9

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

before the date on which the amended return is entered into) by or on behalf of the donor 2. The cost, date, and manner of acquisition.

filed. that relates to the use, sale, or other dispo- 3. A history of the item, including proof of

sition of the donated property, including, authenticity.

Form 8283, Section B, must be attached to for example, the terms of any agreement

your tax return. Generally, you do not need to 4. A professional quality image of the object.

or understanding that:

attach the qualified appraisal itself, but you

5. The facts on which the appraisal was

should keep a copy as long as it may be relevant a. Temporarily or permanently restricts a based, such as:

under the tax law. There are four exceptions. donee’s right to use or dispose of the

donated property,

•If you claim a deduction of $20,000 or a. Sales or analyses of similar works by

more for donations of art, you must attach the artist, particularly on or around the

b. Earmarks donated property for a partic-

a complete copy of the appraisal. See valuation date.

ular use, or

Paintings, Antiques, and Other Objects of b. Quoted prices in dealer’s catalogs of

c. Reserves to, or confers upon, anyone

Art, earlier. the artist’s works or works of other art-

(other than a donee organization or an

•If you claim a deduction of more than ists of comparable stature.

organization participating with a donee

$500,000 for a donation of property, you organization in cooperative fundraising) c. A record of any exhibitions at which the

must attach the appraisal. See Deductions any right to the income from the specific art object had been displayed.

of More Than $500,000, earlier. donated property or to the possession

d. The economic state of the art market at

of the property, including the right to

•If you claim a deduction of more than $500

the time of valuation, particularly with

for an article of clothing, or a household vote donated securities, to acquire the

respect to the specific property.

item, that is not in good used condition or property by purchase or otherwise, or to

better, that you donated after August 17, designate the person having the in- e. The standing of the artist in his profes-

2006, you must attach the appraisal. See come, possession, or right to acquire sion and in the particular school or time

Deduction over $500 for certain clothing or the property, period.

household items, earlier.

5. The name, address, and taxpayer identifi-

•If you claim a deduction in a tax year be- Number of qualified appraisals. A sepa-

cation number of the qualified appraiser

ginning after August 17, 2006, for an rate qualified appraisal is required for each item

and, if the appraiser is a partner, an em-

easement or other restriction on the exte- of property that is not included in a group of

ployee, or an independent contractor en-

rior of a building in a historic district, you similar items of property. You need only one

gaged by a person other than the donor,

must attach the appraisal. See Building in qualified appraisal for a group of similar items of

the name, address, and taxpayer identifi-

registered historic district, earlier. property contributed in the same tax year, but

cation number of the partnership or the you may get separate appraisals for each item.

person who employs or engages the ap-

Prohibited appraisal fee. Generally, no part A qualified appraisal for a group of similar items

praiser,

of the fee arrangement for a qualified appraisal must provide all of the required information for

6. The qualifications of the qualified appraiser

can be based on a percentage of the appraised each item of similar property. The appraiser,

who signs the appraisal, including the ap-

value of the property. If a fee arrangement is however, may provide a group description for

praiser’s background, experience, educa-

based on what is allowed as a deduction, after selected items the total value of which is not

tion, and any membership in professional

Internal Revenue Service examination or other- more than $100.

appraisal associations,

wise, it is treated as a fee based on a percent-

age of appraised value. However, appraisals are Qualified appraiser. A qualified appraiser is

7. A statement that the appraisal was pre-

not disqualified when an otherwise prohibited an individual who meets all the following require-

pared for income tax purposes,

fee is paid to a generally recognized association ments.

8. The date (or dates) on which the property

that regulates appraisers if:

was valued, 1. The individual either:

•The association is not organized for profit

9. The appraised FMV on the date (or ex-

and no part of its net earnings benefits any a. Has earned an appraisal designation

pected date) of contribution,

private shareholder or individual, from a recognized professional ap-

praiser organization for demonstrated

10. The method of valuation used to determine

•The appraiser does not receive any com-

competency in valuing the type of prop-

FMV, such as the income approach, the

pensation from the association or any

erty being appraised, or

comparable sales or market data ap-

other persons for making the appraisal,

and proach, or the replacement cost less de- b. Has met certain minimum education

preciation approach, and and experience requirements. For real

•The fee arrangement is not based in

property, the appraiser must be li-

whole or in part on the amount of the ap- 11. The specific basis for the valuation, such

censed or certified for the type of prop-

praised value that is allowed as a deduc- as any specific comparable sales transac-

erty being appraised in the state in

tion after an Internal Revenue Service tion.

which the property is located. For prop-

examination or otherwise.

erty other than real property, the ap-

Art objects. The following are examples of

praiser must have successfully

information that should be included in a descrip-

Information included in qualified appraisal. completed college or professional-level

tion of donated property. These examples are

A qualified appraisal must include the following coursework relevant to the property be-

for art objects. A similar detailed breakdown

information: ing valued, must have at least 2 years

should be given for other property. Appraisals of

of experience in the trade or business

1. A description of the property in sufficient art objects —paintings in particular — should in-

of buying, selling, or valuing the type of

detail for a person who is not generally clude all of the following.

property being valued, and must fully

familiar with the type of property to deter- 1. A complete description of the object, indi- describe in the appraisal his or her

mine that the property appraised is the cating the: qualifying education and experience.

property that was (or will be) contributed,

2. The physical condition of any tangible a. Size, 2. The individual regularly prepares apprais-

property, als for which he or she is paid.

b. Subject matter,

3. The date (or expected date) of contribu- 3. The individual demonstrates verifiable edu-

c. Medium,

tion, cation and experience in valuing the type

d. Name of the artist (or culture), and of property being appraised. To do this, the

4. The terms of any agreement or under-

appraiser can make a declaration in the

standing entered into (or expected to be e. Approximate date created.

Page 10 Publication 561 (April 2007)

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appraisal that, because of his or her back- 1. The appraiser knows or should have •Refer the issue to the Commissioner’s Art

ground, experience, education, and mem- known the appraisal would be used in con- Advisory Panel (a group of dealers and

bership in professional associations, he or nection with a return or claim for refund, museum directors who review and recom-

she is qualified to make appraisals of the and mend acceptance or adjustment of taxpay-

type of property being valued. ers’ claimed values for major paintings,

2. The appraisal results in the 20% or 40%

4. The individual has not been prohibited sculptures, decorative arts, and antiques),

penalty for a valuation misstatement de-

from practicing before the IRS under sec- or

scribed later under Penalty.

tion 330(c) of title 31 of the United States •Contract with an independent dealer,

The penalty imposed on the appraiser is the

Code at any time during the 3-year period scholar, or appraiser to appraise the prop-

smaller of:

ending on the date of the appraisal.

erty when the objects require appraisers of

5. The individual is not an excluded individ- 1. The greater of: highly specialized experience and knowl-

ual. edge.

a. 10% of the underpayment due to the

In addition, the appraiser must complete misstatement, or

Form 8283, Section B, Part III. More than one Responsibility of the Service. The Service is

b. $1,000, or

appraiser may appraise the property, provided responsible for reviewing appraisals, but it is not

that each complies with the requirements, in- responsible for making them. Supporting the

2. 125% of the gross income received for the

cluding signing the qualified appraisal and Form FMV listed on your return is your responsibility.

8283, Section B, Part III. appraisal.

Excluded individuals. The following per- In addition, any appraiser who falsely or The Service does not accept appraisals with-

sons cannot be qualified appraisers with respect fraudulently overstates the value of property de- out question. Nor does the Service recognize

to particular property. scribed in a qualified appraisal of a Form 8283 any particular appraiser or organization of ap-

that the appraiser has signed may be subject to

1. The donor of the property, or the taxpayer praisers.

a civil penalty for aiding and abetting as under-

who claims the deduction. statement of tax liability, and may have his or her

2. The donee of the property. appraisal disregarded. Timing of Service action. The Service gener-

3. A party to the transaction in which the do- ally does not approve valuations or appraisals

Form 8283

nor acquired the property being appraised, before the actual filing of the tax return to which

unless the property is donated within 2 the appraisal applies. In addition, the Service

Generally, if the claimed deduction for an item of

months of the date of acquisition and its generally does not issue advance rulings ap-

donated property is more than $5,000, you must

appraised value is not more than its acqui- proving or disapproving such appraisals.

attach Form 8283 to your tax return and com-

sition price. This applies to the person who

Exception. For a request submitted as de-

plete Section B.

sold, exchanged, or gave the property to

the donor, or any person who acted as an scribed earlier under Art valued at $50,000 or

If you do not attach Form 8283 to your return

agent for the transferor or donor in the more, the Service will issue a Statement of

and complete Section B, the deduction will not

transaction. Value that can be relied on by the donor of the

be allowed unless your failure was due to rea-

item of art.

4. Any person employed by any of the above sonable cause, and not willful neglect, or was

persons. For example, if the donor ac- due to a good faith omission. If the IRS requests

quired a painting from an art dealer, that you submit the form because you did not

neither the dealer nor persons employed attach it to your return, you must comply within

by the dealer can be qualified appraisers 90 days of the request or the deduction will be Penalty

for that painting. disallowed.

You may be liable for a penalty if you overstate

5. Any person related under section 267(b) of You must attach a separate Form 8283 for the value or adjusted basis of donated property.

the Internal Revenue Code to any of the each item of contributed property that is not part

above persons or married to a person re- of a group of similar items. If you contribute

lated under section 267(b) to any of the similar items of property to the same donee 20% penalty. The penalty is 20% of the un-

above persons. organization, you need attach only one Form derpayment of tax related to the overstatement

8283 for those items. If you contribute similar

6. An appraiser who appraises regularly for a if:

person in (1), (2), or (3), and who does not items of property to more than one donee organ- •The value or adjusted basis claimed on

perform a majority of his or her appraisals ization, you must attach a separate form for the return is 200% (150% for returns filed

made during his or her tax year for other each donee. after August 17, 2006) or more of the cor-

persons.

rect amount, and

Internal Revenue Service

In addition, a person is not a qualified ap-

•You underpaid your tax by more than

praiser for a particular donation if the donor had Review of Appraisals

knowledge of facts that would cause a reasona- $5,000 because of the overstatement.

ble person to expect the appraiser to falsely In reviewing an income tax return, the Service

overstate the value of the donated property. For may accept the claimed value of the donated 40% penalty. The penalty is 40%, rather than

example, if the donor and the appraiser make an property, based on information or appraisals 20%, if:

agreement concerning the amount at which the sent with the return, or may make its own deter-

property will be valued, and the donor knows •The value or adjusted basis claimed on

mination of FMV. In either case, the Service

that amount is more than the FMV of the prop- the return is 400% (200% for returns filed

may:

erty, the appraiser is not a qualified appraiser for after August 17, 2006) or more of the cor-

•Contact the taxpayer to get more informa-

the donation. rect amount, and

tion,

Appraiser penalties. An appraiser who •You underpaid your tax by more than

•Refer the valuation problem to a Service

prepares an incorrect appraisal may have to pay $5,000 because of the overstatement.

a penalty if: appraiser or valuation specialist,

Publication 561 (April 2007) Page 11

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

•View Internal Revenue Bulletins (IRBs) stores, copy centers, city and county gov-

published in the last few years. ernment offices, credit unions, and office

How To Get Tax Help supply stores have a collection of products

•Figure your withholding allowances using available to print from a CD or photocopy

You can get help with unresolved tax issues, our withholding calculator. from reproducible proofs. Also, some IRS

order free publications and forms, ask tax ques-

•Sign up to receive local and national tax offices and libraries have the Internal Rev-

tions, and get information from the IRS in sev- news by email. enue Code, regulations, Internal Revenue

eral ways. By selecting the method that is best

Bulletins, and Cumulative Bulletins avail-

for you, you will have quick and easy access to •Get information on starting and operating able for research purposes.

tax help. a small business.

•Services. You can walk in to your local

Contacting your Taxpayer Advocate. The Taxpayer Assistance Center every busi-

Taxpayer Advocate Service is an independent ness day for personal, face-to-face tax

Phone. Many services are available by

organization within the IRS whose employees help. An employee can explain IRS letters,

phone.

assist taxpayers who are experiencing eco- request adjustments to your tax account,

nomic harm, who are seeking help in resolving or help you set up a payment plan. If you

tax problems that have not been resolved •Ordering forms, instructions, and publica- need to resolve a tax problem, have ques-

through normal channels, or who believe that an tions. Call 1-800-829-3676 to order cur- tions about how the tax law applies to your

IRS system or procedure is not working as it rent-year forms, instructions, and individual tax return, or you’re more com-

should. publications, and prior-year forms and in- fortable talking with someone in person,

You can contact the Taxpayer Advocate structions. You should receive your order visit your local Taxpayer Assistance

Service by calling toll-free 1-877-777-4778 or within 10 days. Center where you can spread out your

TTY/TDD 1-800-829-4059 to see if you are eligi- records and talk with an IRS representa-

•Asking tax questions. Call the IRS with

ble for assistance. You can also call or write to your tax questions at 1-800-829-1040. tive face-to-face. No appointment is nec-

your local taxpayer advocate, whose phone essary, but if you prefer, you can call your

number and address are listed in your local •Solving problems. You can get local Center and leave a message re-

telephone directory and in Publication 1546, The face-to-face help solving tax problems questing an appointment to resolve a tax

Taxpayer Advocate Service of the IRS - How To every business day in IRS Taxpayer As- account issue. A representative will call

Get Help With Unresolved Tax Problems. You sistance Centers. An employee can ex- you back within 2 business days to sched-

can file Form 911, Application for Taxpayer As- plain IRS letters, request adjustments to ule an in-person appointment at your con-

sistance Order, or ask an IRS employee to com- your account, or help you set up a pay- venience. To find the number, go to

plete it on your behalf. For more information, go ment plan. Call your local Taxpayer Assis- www.irs.gov/localcontacts or look in the

to www.irs.gov/advocate.tance Center for an appointment. To find phone book under United States Govern-

the number, go to www.irs.gov/localcon-

Low income tax clinics (LITCs). LITCs are ment, Internal Revenue Service.

tacts or look in the phone book under

independent organizations that provide low in- United States Government, Internal Reve-

come taxpayers with representation in federal Mail. You can send your order for

nue Service.

tax controversies with the IRS for free or for a forms, instructions, and publications to

nominal charge. The clinics also provide tax •TTY/TDD equipment. If you have access the address below. You should receive

education and outreach for taxpayers with lim- to TTY/TDD equipment, call a response within 10 business days after your

ited English proficiency or who speak English as 1-800-829-4059 to ask tax questions or to request is received.

a second language. Publication 4134, Low In- order forms and publications.

come Taxpayer Clinic List, provides information National Distribution Center

•TeleTax topics. Call 1-800-829-4477 to lis-

on clinics in your area. It is available at www.irs. ten to pre-recorded messages covering P.O. Box 8903

gov or at your local IRS office. various tax topics. Bloomington, IL 61702-8903

Free tax services. To find out what services •Refund information. To check the status of CD for tax products. You can order

are available, get Publication 910, IRS Guide to your 2006 refund, call 1-800-829-4477 Publication 1796, IRS Tax Products

Free Tax Services. It contains a list of free tax and press 1 for automated refund informa- CD, and obtain:

publications and describes other free tax infor- tion or call 1-800-829-1954. Be sure to

•A CD that is released twice so you have

mation services, including tax education and wait at least 6 weeks from the date you the latest products. The first release ships

assistance programs and a list of TeleTax top- filed your return (3 weeks if you filed elec-

ics. in January and the final release ships in

tronically). Have your 2006 tax return March.

available because you will need to know

Internet. You can access the IRS web- your social security number, your filing

site at www.irs.gov 24 hours a day, 7 •Current-year forms, instructions, and pub-

status, and the exact whole dollar amount

days a week to: lications.

of your refund.

•E-file your return. Find out about commer- •Prior-year forms, instructions, and publica-

cial tax preparation and e-file services tions.

Evaluating the quality of our telephone serv-

available free to eligible taxpayers. •Bonus: Historical Tax Products DVD -

ices. To ensure IRS representatives give accu-

•Check the status of your 2006 refund. Ships with the final release.

rate, courteous, and professional answers, we

Click on Where’s My Refund. Wait at least use several methods to evaluate the quality of •Tax Map: an electronic research tool and

6 weeks from the date you filed your re- our telephone services. One method is for a finding aid.

turn (3 weeks if you filed electronically). second IRS representative to listen in on or

Have your 2006 tax return available be- •Tax law frequently asked questions.

record random telephone calls. Another is to ask

cause you will need to know your social some callers to complete a short survey at the •Tax Topics from the IRS telephone re-

security number, your filing status, and the end of the call. sponse system.

exact whole dollar amount of your refund.

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

Walk-in. Many products and services

•Download forms, instructions, and publica- forms.

are available on a walk-in basis.

tions.

•Internal Revenue Bulletins.

•Order IRS products online.

•Products. You can walk in to many post •Toll-free and email technical support.

•Research your tax questions online. offices, libraries, and IRS offices to pick up

Buy the CD from National Technical Informa-

•Search publications online by topic or certain forms, instructions, and publica-

tion Service (NTIS) at www.irs.gov/cdorders for

keyword. tions. Some IRS offices, libraries, grocery

Page 12 Publication 561 (April 2007)

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$25 (no handling fee) or call 1-877-CDFORMS •All the business tax forms, instructions, •A site map of the CD to help you navigate

(1-877-233-6767) toll free to buy the CD for $25 the pages of the CD with ease.

and publications needed to successfully

(plus a $5 handling fee). Price is subject to manage a business. •An interactive “Teens in Biz” module that

change. gives practical tips for teens about starting

•Tax law changes for 2006.

their own business, creating a business

CD for small businesses. Publication •Tax Map: an electronic research tool and plan, and filing taxes.

3207, The Small Business Resource finding aid.

Guide CD for 2006, is a must for every An updated version of this CD is available

•Web links to various government agen-

small business owner or any taxpayer about to each year in early April. You can get a free copy

cies, business associations, and IRS orga-

start a business. This year’s CD includes: by calling 1-800-829-3676 or by visiting

nizations.

•Helpful information, such as how to pre- www.irs.gov/smallbiz.

•“Rate the Product” survey — your opportu-

pare a business plan, find financing for

your business, and much more. nity to suggest changes for future editions.

Publication 561 (April 2007) Page 13

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To help us develop a more useful index, please let us know if you have ideas for index entries.

Index See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.

Terms of purchase or

AJS

sale ...................... 2

Aircraft ....................... 5 Jewelry and gems ............ 4 Stamps ....................... 5

Annuities ..................... 7 Statement of Value .......... 11

Annuity contracts ............ 7 Stocks ....................... 5

Antiques ..................... 4 Suggestions for

Date of contribution .......... 2 Life insurance ................ 7 publication ................. 1

Appraisals ................... 8 Deductions of more than

Cost of ..................... 9 $5,000 ...................... 9 M

IRS review of .............. 11 Deductions of more than T

Market conditions, effect on

Qualified appraisal .......... 9 $500,000 ................... 9 Tax help ..................... 12

value ....................... 3

Appraiser ................... 10 Taxpayer Advocate .......... 12

More information (See Tax help)

Art objects ................... 4 FTTY/TDD information ........ 12

Valued at $20,000 or Fair market value ............. 2

more ..................... 4 O

Comparable properties, sales U

Valued at $50,000 or Opinions of experts .......... 3

of ........................ 3

more ..................... 4 Used clothing ..............4, 9

Cost ........................ 2

Assistance (See Tax help) Date of contribution .......... 2 PV

Determining FMV ............ 2 Paintings ..................... 4

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

BValuation of property ......... 4

Partial interest ............... 7

Problems in determining Annuities ................... 7

Boats ........................ 5 Past events, effect on

FMV...................... 3 Cars, boats, and aircraft ..... 5

Bonds ........................ 5 value ....................... 4

Replacement cost ........... 3 Collections .................. 5

Books ........................ 5 Patents ....................... 5 Household goods ........... 4

Form 8283 ................... 11

Business, interest in ......... 7 Penalties: Interest in a business ........ 7

Formulas, use in valuing Imposed on appraiser ...... 11 Inventory ................... 5

property .................... 2 Imposed on taxpayer ....... 11

CJewelry and gems ........... 4

Free tax services ............ 12 Publications (See Tax help)

Cars .......................... 5 Life insurance and annuity

Future events, effect on Publicly traded securities .... 9 contracts ................. 7

Clothing, used .............4, 9 value ....................... 4 Paintings, antiques, art

Coins ........................ 5 objects ................... 4

Collections ................... 5 HPartial interest in property .... 7

Books ...................... 5 Qualified appraisal ........... 9

Help (See Tax help) Patents ..................... 5

Coins ....................... 5 Qualified appraiser .......... 10 Real estate ................. 6

Historic building ............. 8

Stamps ..................... 5 Qualified conservation Remainder interests ......... 7

Household goods .......... 4, 9

Comments on publication .... 1 contribution ................ 8 Reversion interests .......... 7

Comparable properties, sales Stocks and bonds ........... 5

of .......................... 3 IRTerms of years .............. 7

Conservation contribution .... 8 Interest in a business ........ 7 Used clothing ............... 4

Real estate ................... 6

Cost .......................... 2 Inventory ..................... 5 Remainder interests .......... 7 ■

Rate of increase or IRS review of appraisals ..... 11 Replacement cost ............ 3

decrease ................. 2 Exception .................. 11 Reversion interests .......... 7

Page 14 Publication 561 (April 2007)

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Tax Publications for Individual Taxpayers

General Guides

Your Rights as a Taxpayer

Your Federal Income Tax (For

Individuals)

Farmer’s Tax Guide

Tax Guide for Small Business (For

Individuals Who Use Schedule C or

C-EZ)

Tax Calendars for 2007

Highlights of 2006 Tax Changes

IRS Guide to Free Tax Services

Specialized Publications

Armed Forces’ Tax Guide

Travel, Entertainment, Gift, and Car

Expenses

Exemptions, Standard Deduction, and

Filing Information

Medical and Dental Expenses (Including

the Health Coverage Tax Credit)

Child and Dependent Care Expenses

Divorced or Separated Individuals

Tax Withholding and Estimated Tax

Foreign Tax Credit for Individuals

U.S. Government Civilian Employees

Stationed Abroad

Social Security and Other Information

for Members of the Clergy and

Religious Workers

U.S. Tax Guide for Aliens

Moving Expenses

Selling Your Home

Credit for the Elderly or the Disabled

Taxable and Nontaxable Income

Charitable Contributions

Residential Rental Property

Commonly Used Tax Forms

Miscellaneous Deductions

Tax Information for First-Time

Homeowners

Reporting Tip Income

Installment Sales

Partnerships

Sales and Other Dispositions of Assets

Casualties, Disasters, and Thefts

Investment Income and Expenses

Basis of Assets

Recordkeeping for Individuals

Older Americans’ Tax Guide

Community Property

Examination of Returns, Appeal Rights,

and Claims for Refund

Survivors, Executors, and

Administrators

Determining the Value of Donated

Property

Mutual Fund Distributions

Tax Guide for Individuals With Income

From U.S. Possessions

Pension and Annuity Income

Casualty, Disaster, and Theft Loss

Workbook (Personal-Use Property)

Business Use of Your Home (Including

Use by Daycare Providers)

Individual Retirement Arrangements

(IRAs)

Tax Highlights for U.S. Citizens and

Residents Going Abroad

What You Should Know About the IRS

Collection Process

Earned Income Credit (EIC)

Tax Guide to U.S. Civil Service

Retirement Benefits

Tax Highlights for Persons with

Disabilities

Bankruptcy Tax Guide

Social Security and Equivalent

Railroad Retirement Benefits

How Do I Adjust My Tax Withholding?

Passive Activity and At-Risk Rules

Household Employer’s Tax Guide

Tax Rules for Children and

Dependents

Home Mortgage Interest Deduction

How To Depreciate Property

Practice Before the IRS and

Power of Attorney

Introduction to Estate and Gift Taxes

The IRS Will Figure Your Tax

Per Diem Rates

Reporting Cash Payments of Over

$10,000 (Received in a Trade or

Business)

The Taxpayer Advocate Service of the

IRS – How to Get Help With

Unresolved Tax Problems

Derechos del Contribuyente

Cómo Preparar la Declaración de

Impuesto Federal

Crédito por Ingreso del Trabajo

English-Spanish Glossary of Words

and Phrases Used in Publications

Issued by the Internal Revenue

Service

U.S. Tax Treaties

Spanish Language Publications

910

553

509

334

225

463

501

502

503

504

505

514

516

517

519

521

523

524

525

526

527

529

530

531

537

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550

551

552

554

541

555

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561

564

570

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584

587

590

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596

721

901

907

908

915

919

925

926

929

946

936

950

1542

967

1544

1546

596SP

1SP

850

579SP

Que es lo que Debemos Saber sobre

el Proceso de Cobro del IRS

594SP

947

Informe de Pagos en Efectivo en

Exceso de $10,000 (Recibidos en

una Ocupación o Negocio)

1544SP

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

U.S. Individual Income Tax Return

Itemized Deductions & Interest and

Ordinary Dividends

Profit or Loss From Business

Net Profit From Business

Capital Gains and Losses

Supplemental Income and Loss

Earned Income Credit

Profit or Loss From Farming

Credit for the Elderly or the Disabled

Income Tax Return for Single and

Joint Filers With No Dependents

Self-Employment Tax

U.S. Individual Income Tax Return

Interest and Ordinary Dividends for

Form 1040A Filers

Child and Dependent Care

Expenses for Form 1040A Filers

Credit for the Elderly or the

Disabled for Form 1040A Filers

Estimated Tax for Individuals

Amended U.S. Individual Income Tax Return

Unreimbursed Employee Business

Expenses

Underpayment of Estimated Tax by

Individuals, Estates, and Trusts

Power of Attorney and Declaration of

Representative

Child and Dependent Care Expenses

Moving Expenses

Depreciation and Amortization

Application for Automatic Extension of Time

To File U.S. Individual Income Tax Return

Investment Interest Expense Deduction

Additional Taxes on Qualified Plans (Including

IRAs) and Other Tax-Favored Accounts

Alternative Minimum Tax—Individuals

Noncash Charitable Contributions

Change of Address

Expenses for Business Use of Your Home

Nondeductible IRAs

Passive Activity Loss Limitations

1040

Sch A&B

Sch C

Sch C-EZ

Sch D

Sch E

Sch EIC

Sch F

Sch H Household Employment Taxes

Sch R

Sch SE

1040EZ

1040A

Sch 1

Sch 2

Sch 3

1040-ES

1040X

2106 Employee Business Expenses

2106-EZ

2210

2441

2848

3903

4562

4868

4952

5329

6251

8283

8582

8606

8822

8829

Form Number and Title

Sch J Income Averaging for Farmers and Fishermen

Additional Child Tax Credit8812

Education Credits8863

Form Number and Title

See How To Get Tax Help for a variety of ways to get publications, including

by computer, phone, and mail.

970 Tax Benefits for Education

971 Innocent Spouse Relief

Sch D-1 Continuation Sheet for Schedule D

972 Child Tax Credit

Tax Guide for U.S. Citizens and

Resident Aliens Abroad

Net Operating Losses (NOLs) for

Individuals, Estates, and Trusts

536

Tax-Sheltered Annuity Plans (403(b)

Plans)

571

Health Savings Accounts and Other

Tax-Favored Health Plans

969

Installment Agreement Request9465

Publication 561 (April 2007) Page 15

Publication 561 (Rev. April 2007) P561

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