A deduction for noncash contributions is generally subject to certain limitations depending on the type of taxpayer, the nature of the property contributed, and the type of donee organization. Taxpayers are required to obtain a qualified appraisal from a qualified appraiser for donated property which a deduction of more than $5,000 is claimed. (An exception to this long-standing requirement is the new PPA requirement that donated clothing or “household items” in less than good used condition and valued in excess $500 must now also be appraised by a qualified appraiser)
When 100% of the taxpayer’s (donor’s) interest in noncash property having a related-use to a qualifying organization is donated to that organization (donee), the taxpayer is allowed an income tax deduction of an amount equal to either fair market value of the property or the taxpayer’s basis in the property –which is allowed depends on the type of property and the length of time the property was owned by the taxpayer.
Taxpayers may lose all or part of their claimed deduction if any of the following apply: