The guidelines for the valuation of gifts of works of art are established by the Internal Revenue Service and are applied to each donor who wishes to claim a charitable deduction. Copies of the IRS guidelines may be obtained from an IRS office or from a tax attorney or tax accountant.
Property worth $500 or less
The donor establishes the value of the gift based upon records he or she must maintain to support the charitable deduction for the gift. An appraisal is not required for gifts valued at less than $500.
Property worth over $500 but less than $5,000
The donor establishes the value of the gift based on the property’s cost or other basis. The donor must complete Part I of IRS Form 8283 to receive a charitable deduction for the gift. A qualified appraisal is not required for gifts valued between $500 and $4,999. The gift is accepted and recorded based upon the value substantiated by the donor from either receipts, a statement from an art dealer, or some other proof of value and a copy of IRS Form 8283.
Property worth over $5,000 but less than $20,000
The donor must comply with strict appraisal guidelines. The appraisal rules apply to single gifts of works of art or to the aggregate value of a group of similar items of art for which a charitable deduction is claimed.
The gift is accepted and recorded provided the donor meets the following substantiation requirements:
- Obtains a qualified appraisal for the property contributed, and
- Provides a copy of IRS Form 8283 on which the donor claims the charitable deduction.
Property worth over $20,000
The donor must comply with strict appraisal guidelines and must include an 8 X 10 inch color photo or a 4 x 5 inch color slide of each item donated (this data must be attached to the donor’s tax return.) The appraiser must sign part III of IRS Form 8283.
The gift is accepted and recorded provided the donor meets the following substantiation requirements:
- Obtains a qualified appraisal for the property contributed
- Attaches photographs of the subject works of art
- Provides a copy of IRS Form 8283 on which the donor claims the charitable deduction
Whenever possible, the receiving unit should request the transfer of the work of art to that unit by a Deed of Gift signed by the donor.