Noncash Donations: How to Give Art, Stock, and Property

Overview

Donating noncash property — art, publicly traded stock, real estate, vehicles, or other tangible items — is a common way to support charities while potentially reducing taxable income. Unlike cash gifts, noncash contributions require more documentation, possible appraisals, and specific tax reporting. Follow IRS rules closely: they determine how much you can deduct, what forms to file, and when a qualified appraisal is necessary (see IRS Publication 526 and Form 8283) (https://www.irs.gov/publications/p526; https://www.irs.gov/forms-pubs/about-form-8283).

Types of noncash donations and how they’re treated

• Publicly traded securities: If you donate long-term appreciated stock (held more than one year) directly to a qualified public charity, you can normally deduct the fair market value (FMV) at donation without recognizing capital gains — a powerful tax-efficient strategy.
• Real estate: Deductions depend on how the charity will use the property and whether the property is appreciated. Special rules apply for inventory or real estate held for sale.
• Tangible personal property (art, collectibles, vehicles): Deduction depends on whether the property is related to the charity’s exempt purpose. If unrelated, deduction is usually limited to your basis (what you paid) or FMV with additional restrictions.
• Closely held shares and partnership interests: Donations of privately held business interests have special valuation and substantiation rules and often need expert appraisal.

For deeper procedural details, see our guides on How Charitable Deductions Work When Donating Noncash Items and Valuing Noncash Charitable Gifts: Reporting and Appraisal Basics.

Key IRS rules you must know (current as of 2025)

• Substantiation for written acknowledgement: For any single contribution of $250 or more, the charity must provide a contemporaneous written acknowledgement describing the gift and stating whether any goods or services were provided in return (IRS Pub. 526).
• Form 8283: If total noncash contributions for the year exceed $500, you must file Form 8283 with your tax return to report the noncash gifts. (IRS Form 8283 instructions).
• Qualified appraisal requirement: Generally, if a single donated item or group of similar items is valued at more than $5,000, you must obtain a qualified appraisal and attach Section B of Form 8283 unless the gift is publicly traded securities (see Form 8283 instructions).
• FMV vs. basis: For appreciated property held more than one year, you can usually deduct the FMV. For property held one year or less, your deduction is limited to your cost basis.
• Deduction limits and carryovers: Limits depend on the donor’s adjusted gross income (AGI) and the type of property and recipient (public charity vs. private foundation). Excess contributions may be carried forward for up to five years — consult IRS Pub. 526 for current percentage limits.

Citations: IRS Publication 526, Charitable Contributions; Form 8283 instructions (https://www.irs.gov/forms-pubs/about-form-8283).

Common scenarios and how they work

1. Donating appreciated stock

• Example: You bought shares years ago for $5,000; today they’re worth $15,000. If you donate the shares directly to a qualifying charity, you may deduct the $15,000 FMV and avoid paying capital gains tax on the $10,000 appreciation. This is often better than selling and donating cash.
• Practical tip: Transfer the shares electronically if the charity has brokerage arrangements. Ask the charity for transfer instructions to avoid accidental sale and realization of gains.

1. Donating artwork or collectibles

• Valuation: Fine art and collectibles are often subjective; a qualified appraisal is commonly required when the item’s value exceeds $5,000. If the charity will use the art in a way related to its mission (display in a museum, for example), you may deduct FMV; if not, deduction may be limited to your basis.
• Documentation: Keep bills of sale, provenance, photos, and the independent appraisal.

1. Donating real estate

• Review title, liens, and environmental issues before transfer. Charities may decline property with unresolved liabilities.
• If the property is appreciated and the charity keeps it, you often deduct FMV subject to charitable percentage limits. For property the charity must sell, different rules can apply.

1. Donating vehicles

• If the charity sells the vehicle, your deduction generally equals the gross proceeds the charity received from the sale (unless the vehicle is used by the charity in a way related to its mission). The charity must provide Form 1098-C when required.

Documentation checklist (practical, in my practice)

• Contemporaneous written acknowledgement from the charity for any donation ≥ $250 (must state whether you received anything in return).
• Form 8283 completed if total noncash gifts > $500; Section B must be signed by a qualified appraiser when an item exceeds $5,000.
• Qualified appraisal for donated items valued > $5,000 (not required for publicly traded securities).
• Receipts, title transfer documents for vehicles/real estate, photos of items, and proof of transfer (brokerage confirmations for stocks).
• Keep all records for at least three years after filing; longer if you claim an appraisal or large deduction.

In my practice I advise clients to assemble this packet before filing: the appraisal, the charity acknowledgement, Form 8283, and transfer confirmations. That preparation reduces audit risk and speeds tax preparation.

Valuation: fair market value (FMV) and appraisals

FMV is the price at which property would change hands between a willing buyer and a willing seller, neither being forced to act. For many items FMV is straightforward (publicly traded securities); for art, real estate, or business interests it can be complex.

Qualified appraisers must meet IRS criteria (education, experience, and relationship standards). The appraisal report should explain methodology and comparable sales. Attach the appraiser’s summary to Form 8283 as required.

Strategic tax tips

• Donate appreciated securities directly to avoid capital gains and claim FMV deduction.
• Consider donor-advised funds (DAFs) to bunch multiple years of giving into one year for tax timing while distributing grants over time.
• For high-value real estate or complex business interests, consult a tax attorney and a valuation expert before gifting.
• If you expect to exceed AGI deduction limits, plan for carryforward rules and alternative strategies (partial interests, bargain sales, or a charitable remainder trust).

See our deeper strategy pages like Stock Donations: Tax Benefits and Process for step-by-step transfer notes and brokerage instructions.

Useful examples (rounded numbers)

• Example A (stock): Donate long-held stock worth $50,000 with a $10,000 basis. You deduct $50,000 (if donated directly) and avoid paying capital gains tax on the $40,000 gain.
• Example B (art): Donate an original painting valued at $12,000. Because the item exceeds $5,000, you obtain a qualified appraisal and file Section B of Form 8283. If the charity will use the painting in a museum exhibit, you can typically deduct the $12,000 FMV; if the charity plans to sell it, special rules may reduce your deduction.

Common mistakes to avoid

• Failing to get a contemporaneous acknowledgement for gifts ≥ $250.
• Not filing Form 8283 when required, or failing to attach a required appraisal.
• Overvaluing property without comparable evidence — the IRS scrutinizes high noncash deductions.
• Donating property with unresolved liens, environmental problems, or other liabilities the charity might decline.

Audit risk and best practices

Large noncash deductions attract IRS attention. The best defense is careful documentation: qualified appraisals, contemporaneous receipts, completed Form 8283, and evidence of transfer. If audited, you’ll rely on these records to substantiate your deduction.

FAQ (brief)

• Do I deduct cost basis or FMV? For appreciated property held more than a year, you generally deduct FMV. For property held one year or less, deduction is limited to basis. (IRS Pub. 526)
• When is an appraisal required? When a donated item or similar items have a claimed value over $5,000 (qualified appraisal is required) unless the item is publicly traded stock (Form 8283 rules).
• What if the charity sells my donation? If the charity sells your donated property, rules vary; vehicle donations often follow the charity’s gross proceeds, while other property deductions generally remain the FMV at donation but may carry special limitations.

Resources and citations

• IRS Publication 526, Charitable Contributions (https://www.irs.gov/publications/p526)
• IRS Form 8283, Noncash Charitable Contributions (https://www.irs.gov/forms-pubs/about-form-8283)
• IRS guidance on donated vehicles and car, boat, or plane contributions (https://www.irs.gov/charities-non-profits/charitable-contributions)

Internal reading: How Charitable Deductions Work When Donating Noncash Items; Valuing Noncash Charitable Gifts: Reporting and Appraisal Basics; Stock Donations: Tax Benefits and Process.

Professional disclaimer

This article explains general rules and common strategies for U.S. taxpayers and is for educational purposes only. It is not personalized tax or legal advice. Tax outcomes depend on your full financial situation and the current law. Consult a qualified tax advisor, attorney, or certified appraiser before making significant noncash donations.

Author note: In over 15 years advising clients on charitable giving, I’ve found that proactive documentation and early coordination with charities and advisors turn a potentially complex gift into a smooth, tax-efficient contribution.