Valuing Noncash Charitable Gifts: Reporting and Appraisal Basics

Accurate valuation is the bridge between generosity and compliance. When you donate property instead of cash, the size of your allowable deduction depends on the fair market value (FMV) of that property and whether you meet IRS substantiation rules. This guide explains the rules you need to follow in 2025, practical appraisal steps, documentation to keep, and common pitfalls that trigger IRS scrutiny.

Sources and further reading: IRS guidance on valuing noncash contributions and the charitable contribution deduction are primary authoritative sources (see https://www.irs.gov/charities-non-profits/valuing-noncash-contributions and https://www.irs.gov/credits-deductions/individuals/charitable-contributions-deduction). For Form-specific instructions, see the IRS Instructions for Form 8283 (https://www.irs.gov/instructions/i8283).

Quick overview of the main IRS rules (practical summary)

• Form 8283: Complete Form 8283, “Noncash Charitable Contributions,” whenever noncash contributions total more than $500 in a tax year (see IRS Form 8283 instructions).
• Qualified appraisal and Section B of Form 8283: A qualified appraisal and signature of the appraiser and the donee organization are generally required when the claimed deduction for a single item or group of similar items exceeds $5,000.
• Publicly traded securities: For donations of publicly traded securities, you typically substantiate value with a broker statement showing the gift date and quantity; a separate appraisal is not required in most cases.
• Vehicles and special property: Vehicles and certain other property have special valuation rules — for example, if a charity sells your donated vehicle, your deduction is generally limited to the vehicle’s sale price unless the charity materially uses or improves it. See IRS guidance on vehicle donations.

These rules are summarized in IRS publications: “Valuing Noncash Contributions” and the “Charitable Contributions Deduction” pages (links above) and in the IRS Instructions for Form 8283.

What counts as fair market value (FMV)

Fair market value is the price a willing buyer would pay a willing seller for the property when neither is compelled to buy or sell and both have reasonable knowledge of relevant facts. FMV for donated property should reflect the item’s condition and recent market activity for comparable items.

Examples:

• Donated publicly traded stock: FMV = average of the high and low price on the date of the contribution (or the closing price depending on broker guidance).
• Antiques or art: FMV is supported by recent comparable sales (auction records, dealer sales) and usually requires a qualified appraisal for high-value items.
• Used clothing or household goods: FMV is often low — the IRS expects items to be in good used condition or better; otherwise the deduction may be disallowed.

When you must get a qualified appraisal

The IRS requires a qualified appraisal for most noncash donations when the claimed deduction for an individual property (or a group of similar items donated together) is more than $5,000. The appraisal must be obtained no earlier than 60 days before the contribution and must be prepared by a qualified appraiser.

What makes an appraiser “qualified”? Under IRS guidance, a qualified appraiser generally:

• Has specific education and experience in valuing the type of property being appraised;
• Regularly performs appraisals and charges a fee for them;
• Demonstrates verifiable education and credentials (licenses, professional designations), and
• Is not prohibited from being the donor, donee, or related to those parties.

The appraisal must meet the detailed content requirements in the IRS rules and the appraiser must sign the appropriate section of Form 8283 (Section B) when required. See the IRS Instructions for Form 8283 for the exact filing and signature rules (https://www.irs.gov/instructions/i8283).

Step-by-step valuation and reporting checklist

1. Identify the property type and estimated FMV. Use recent comparable sales, broker statements, or market data.
2. Determine whether Form 8283 is required (total noncash gifts > $500) and whether Section B (appraisal) is required (> $5,000 for a single item or group).
3. If required, hire a qualified appraiser and obtain a written appraisal dated within 60 days before the donation.
4. Complete Form 8283 accurately. For gifts requiring appraisal, attach the appraisal to your return when filing unless other exceptions apply.
5. Collect donee acknowledgments and any special documentation the charity can provide (sale receipts, use statements, or acknowledgment of receipt).
6. Keep all records for at least three years from the date you file the return; certain transactions may warrant longer retention.

Internal resources that clarify documentation and recordkeeping include our guides on Form 8283 and documenting charitable contributions: Form 8283 — Noncash Charitable Contributions and Documenting Charitable Contributions: Receipts, Substantiation, and IRS Rules.

Practical examples (illustrative)

• Example 1 — Donating a vintage motorcycle (FMV $6,200): Because the claimed value is over $5,000, you must obtain a qualified appraisal, complete Form 8283 Section B, and have the appraiser and the charity sign the form. Attach the appraisal to your return.

• Example 2 — Donating $2,000 of listed stock: No appraisal required. Substantiate the gift with a broker-generated statement showing the date and shares transferred and complete Form 8283 if total noncash gifts for the year exceed $500.

• Example 3 — Donating a used sofa in fair condition (FMV $50): No appraisal; record the donation with a dated receipt from the charity and keep photos and a condition note. If the charity provides a written acknowledgment, retain it for your records.

Reporting nuances and special property rules

• Grouping similar items: The $5,000 threshold can apply to a group of similar items donated at the same time (for example, a collection of coins). Determine whether the group rule applies by consulting Form 8283 instructions and a tax advisor.
• Gifts of partial interests, closely held stock, private equity, or intellectual property often carry additional filing or valuation requirements (see IRS guidance and our pages on donating private equity and intellectual property reporting — Form 8899 may apply to certain IP donations).
• Donee reporting: If a charity sells or disposes of donated property within three years, the donee may be required to file Form 8282 and provide information to the donor. That reporting can affect the donor’s substantiation and should be monitored.

For more on related filing forms and what charities must file after a donation, see our glossary entries for Form 8282 and related topics.

Documentation you should keep (minimum)

• Written acknowledgment from the charity showing the gift date and description.
• Appraisal report (if required) meeting IRS standards, plus appraiser credentials and signed Form 8283 Section B.
• Evidence of FMV for publicly traded securities (broker statements) or comparable sales data for collectibles and real estate.
• Photos and condition notes for personal property, receipts for shipping or transport if relevant.

See also our guide “How to Document Charitable Donations for Tax Time” for templates and examples: https://finhelp.io/glossary/how-to-document-charitable-donations-for-tax-time/.

Common mistakes and audit triggers

• Overvaluing property without comparable market evidence: Inflated valuations are a common audit flag.
• Skipping Form 8283 when required or failing to attach the appraisal when one is required.
• Using an appraiser with a conflict of interest (family, business partner) or an appraiser who lacks relevant credentials.
• Donating property in poor condition and claiming an unreasonable FMV — the IRS often reduces or disallows such claims.

If the IRS challenges your valuation, a complete file with contemporaneous documentation, the appraisal, and market comparables improves your defense. Without substantiation you risk disallowance of the deduction and possible penalties.

Tax strategy notes (practical advice from practice)

• Donate appreciated publicly traded securities (held long-term) directly to public charities to avoid capital gains tax while taking a deduction for FMV, typically limited by AGI percentage rules. This strategy is often cleaner than giving assets to a donor-advised fund for later distribution if immediate deduction and simple substantiation are priorities.
• For high-value and complex assets (real estate, intellectual property, business interests), consult a tax professional and a qualified appraiser before completing the transfer. Early planning avoids missed documentation windows and incorrect valuations.
• Consider staging gifts or using a donor-advised fund to manage timing and substantiation requirements, but remember appraisal rules still apply for certain noncash gifts.

Penalties and compliance risk

Misreporting the value of noncash gifts can lead to denial of the deduction and potential penalties or interest. The IRS may impose accuracy-related penalties if it determines negligence or substantial valuation misstatement. Proper appraisal procedures and reliable documentation materially reduce these risks.

If your noncash gift triggers complex filing rules or large dollar amounts, seek a CPA or tax attorney experienced in charitable giving. For many donors I work with, the incremental cost of a proper appraisal is small relative to the tax benefit and audit protection it provides.

Frequently asked practical questions (short answers)

• Must I always attach the appraisal to my return? If Section B of Form 8283 is required, attach the appraisal as directed by the Form 8283 instructions.
• Are broker statements acceptable proof for donated stock? Yes — broker records showing the transfer date and quantity are usually sufficient for publicly traded securities.
• When does a charity’s sale of my donated property matter to me? If a charity sells the donated property within three years, the donee’s filing of Form 8282 may create follow-up reporting or affect substantiation; keep lines of communication open with the donee organization.

Closing and next steps

Valuing noncash charitable gifts accurately protects your tax benefit and supports the receiving organization. Start by identifying the property type and estimated FMV, determine whether Form 8283 and a qualified appraisal are required, and obtain professional help for high-value or complex donations.

For step-by-step instructions on filling out Form 8283 and examples of documentation, see our detailed glossary entry: Form 8283 — Noncash Charitable Contributions. To learn more about recordkeeping and receipts, see Documenting Charitable Contributions: Receipts, Substantiation, and IRS Rules.

Professional disclaimer: This article is educational and does not constitute tax or legal advice. Rules change and facts vary; consult a qualified tax professional or the IRS guidance cited here for advice tailored to your situation. Authoritative IRS references used in this article include: “Valuing Noncash Contributions” (https://www.irs.gov/charities-non-profits/valuing-noncash-contributions), “Charitable Contributions Deduction” (https://www.irs.gov/credits-deductions/individuals/charitable-contributions-deduction), and the Instructions for Form 8283 (https://www.irs.gov/instructions/i8283).