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Instructions for Form 8283 2006 Tax Year

Specific Instructions

This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.

Table of Contents

Identifying number.   Individuals must enter their social security number. All other filers should enter their employer identification number.

Section A

Part I, Information on Donated Property

Line 1

Column (b).   Describe the property in sufficient detail. The greater the value of the property, the more detail you must provide. For example, a personal computer should be described in more detail than pots and pans. For a vehicle, give the year, make, model, condition, and mileage at the time of the donation (for example, “1963 Studebaker Lark, fair condition,135,000 miles”). If you do not know the actual mileage, use a good faith estimate based on car repair records or similar evidence.

  For securities, include the following:

  • Name of the issuer,

  • Kind of security,

  • Whether a share of a mutual fund, and

  • Whether regularly traded on a stock exchange or in an over-the-counter market.

Note.

If the amount you claimed as a deduction for the item is $500 or less, you do not have to complete columns (d), (e), and (f).

Column (d).   Enter the approximate date you acquired the property. If it was created, produced, or manufactured by or for you, enter the date it was substantially completed.

Column (e).   State how you acquired the property. This could be by purchase, gift, inheritance, or exchange.

Column (f).   Do not complete this column for property held at least 12 months or publicly traded securities. Keep records on cost or other basis.

Note.

If you have reasonable cause for not providing the information in columns (d) and (f), attach an explanation.

Column (g).   Enter the FMV of the property on the date you donated it. You must attach a statement if:

  • You were required to reduce the FMV to figure the amount of your deduction, or

  • You gave a qualified conservation contribution.

See Fair Market Value (FMV) beginning on page 2 for the type of statement to attach.

Column (h).   Enter the method(s) you used to determine the FMV.

  Examples of entries to make include “Appraisal,” “Thrift shop value” (for clothing or household items), “Catalog” (for stamp or coin collections), or “Comparable sales” (for real estate and other kinds of assets). See Pub. 561.

Part II, Partial Interests and Restricted Use Property

If Part II applies to more than one property, attach a separate statement. Give the required information for each property separately. Identify which property listed in Part I the information relates to.

Lines 2a Through 2e

Complete lines 2a-2e only if you contributed less than the entire interest in the donated property during the tax year. On line 2b, enter the amount claimed as a deduction for this tax year and in any prior tax years for gifts of a partial interest in the same property.

Lines 3a Through 3c

Complete lines 3a-3c only if you attached restrictions to the right to the income, use, or disposition of the donated property. An example of a “restricted use” is furniture that you gave only to be used in the reading room of an organization's library. Attach a statement explaining (1) the terms of any agreement or understanding regarding the restriction, and (2) whether the property is designated for a particular use.

Section B

Part I, Information on Donated Property

You must get a written appraisal from a qualified appraiser before completing Part I. However, see the Exceptions below.

Generally, you do not need to attach the appraisals to your return but you should keep them for your records. But see Art valued at $20,000 or more, Clothing and household items not in good used condition, Easements on buildings in historic districts, and Deduction of more than $500,000 on page 5.

Exceptions.   You do not need a written appraisal if the property is:

  1. Nonpublicly traded stock of $10,000 or less,

  2. A vehicle (including a car, boat, or airplane) if your deduction for the vehicle is limited to the gross proceeds from its sale,

  3. Intellectual property (as defined on page 3),

  4. Certain securities considered to have market quotations readily available (see Regulations section 1.170A-13(c)(7)(xi)(B)),

  5. Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A), or

  6. Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business.

  Although a written appraisal is not required for the types of property just listed, you must provide certain information in Part I of Section B (see the instructions for line 5 on this page) and have the donee organization complete Part IV.

Art valued at $20,000 or more.   If your total deduction for art is $20,000 or more, you must attach a complete copy of the signed appraisal. For individual objects valued at $20,000 or more, a photograph must be provided upon request. The photograph must be of sufficient quality and size (preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches) to fully show the object.

Clothing and household items not in good used condition.   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. The appraisal is required whether the donation is reportable in Section A or Section B. See Clothing and household items on page 3.

Easements on buildings in historic districts.   If you claim a deduction for a qualified conservation contribution in a tax year beginning after August 17, 2006, for an easement on the exterior of a building in a registered historic district, you must include a qualified appraisal, photographs, and certain other information with your return. See Easements on buildings in historic districts on page 3.

Deduction of more than $500,000.   If you claim a deduction of more than $500,000 for an item (or group of similar items) donated to one or more donees, you must attach a qualified appraisal of the property to your return unless an exception applies. See Exceptions beginning on page 4.

Appraisal Requirements

The appraisal must be made by a qualified appraiser (as defined on page 6) in accordance with generally accepted appraisal standards. It also must meet the relevant requirements of Regulations section 1.170A-13(c)(3) and Notice 2006-96. Notice 2006-96, 2006-46 I.R.B. 902, is available at
www.irs.gov/irb/2006-46_IRB/ar13.html.

The appraisal must be made not earlier than 60 days before the date you contribute the property. You must receive the appraisal before the due date (including extensions) of the return on which you first claim a deduction for the property. For a deduction first claimed on an amended return, the appraisal must be received before the date the amended return was filed.

A separate qualified appraisal and a separate Form 8283 are required for each item of property except for an item that is part of a group of similar items. Only one appraisal is required for a group of similar items contributed in the same tax year, if it includes all the required information for each item. The appraiser may group similar items with a collective value appraised at $100 or less.

If you gave similar items to more than one donee for which you claimed a total deduction of more than $5,000, you must attach a separate form for each donee.

Example.

You claimed a deduction of $2,000 for books given to College A, $2,500 for books given to College B, and $900 for books given to a public library. You must attach a separate Form 8283 for each donee.

Line 5

Note.

You must complete at least column (a) of line 5 (and column (b) if applicable) before submitting Form 8283 to the donee. You may then complete the remaining columns.

Column (a).   Provide a detailed description so a person unfamiliar with the property could be sure the property that was appraised is the property that was contributed. The greater the value of the property, the more detail you must provide.

Column (c).   Include the FMV from the appraisal. If you were not required to get an appraisal, include the FMV you determine to be correct.

Columns (d)-(f).   If you have reasonable cause for not providing the information in columns (d), (e), or (f), attach an explanation so your deduction will not automatically be disallowed.

Column (g).   A bargain sale is a transfer of property that is in part a sale or exchange and in part a contribution. Enter the amount received for bargain sales.

Column (h).   Complete column (h) only if you were not required to get an appraisal, as explained earlier.

Column (i).   Complete column (i) only if you donated securities for which market quotations are considered to be readily available because the issue satisfies the five requirements described in Regulations section 1.170A-13(c)(7)(xi)(B).

Part II, Taxpayer (Donor) Statement

Complete Section B, Part II, for each item included in Section B, Part I, that has an appraised value of $500 or less. Because you do not have to show the value of these items in Section B, Part I, of the donee's copy of Form 8283, clearly identify them for the donee in Section B, Part II. Then, the donee does not have to file Form 8282, Donee Information Return, for items valued at $500 or less. See the Note beginning on page 6 for more details about filing Form 8282.

The amount of information you give in Section B, Part II, depends on the description of the donated property you enter in Section B, Part I. If you show a single item as “Property A” in Part I and that item is appraised at $500 or less, then the entry “Property A” in Part II is enough. However, if “Property A” consists of several items and the total appraised value is over $500, list in Part II any item(s) you gave that is valued at $500 or less.

All shares of nonpublicly traded stock or items in a set are considered one item. For example, a book collection by the same author, components of a stereo system, or six place settings of a pattern of silverware are one item for the $500 test.

Example.

You donated books valued at $6,000. The appraisal states that one of the items, a collection of books by author “X,” is worth $400. On the Form 8283 that you are required to give the donee, you decide not to show the appraised value of all of the books. But you also do not want the donee to have to file Form 8282 if the collection of books is sold within 3 years after the donation. If your description of Property A on line 5 includes all the books, then specify in Part II the “collection of books by X included in Property A.” But if your Property A description is “collection of books by X,” the only required entry in Part II is “Property A.”

In the above example, you may have chosen instead to give a completed copy of Form 8283 to the donee. The donee would then be aware of the value. If you include all the books as Property A on line 5, and enter $6,000 in column (c), you may still want to describe the specific collection in Part II so the donee can sell it without filing Form 8282.

Part III, Declaration of Appraiser

If you had to get an appraisal, you must get it from a qualified appraiser. A qualified appraiser is an individual who meets all the following requirements.

  1. The individual either:

    1. Has earned an appraisal designation from a recognized professional appraiser organization for demonstrated competency in valuing the type of property being appraised, or

    2. Has met certain minimum education and experience requirements.

  2. The individual regularly prepares appraisals for which he or she is paid.

  3. The individual demonstrates verifiable education and experience in valuing the type of property being appraised. To do this, the appraiser can make a declaration that, because of his or her background, experience, education, and membership in professional associations, he or she is qualified to make appraisals of the type of property being valued. The declaration must be part of the appraisal. However, if the appraisal was already completed without this declaration, the declaration can be made separately and associated with the appraisal.

  4. The individual has not been prohibited from practicing before the IRS under section 330(c) of title 31 of the United States Code at any time during the 3-year period ending on the date of the appraisal.

In addition, the appraiser must complete Part III of Form 8283. See section 170(f)(11)(E), Notice 2006-96, and Regulations section 1.170A-13(c)(5) for details.

Persons who cannot be qualified appraisers are listed in the Declaration of Appraiser. Generally, a party to the transaction in which you acquired the property being appraised will not qualify to sign the declaration. But a person who sold, exchanged, or gave the property to you may sign the declaration if the property was donated within 2 months of the date you acquired it and the property's appraised value did not exceed its acquisition price.

An appraiser may not be considered qualified if you had knowledge of facts that would cause a reasonable person to expect the appraiser to falsely overstate the value of the property. An example of this is an agreement between you and the appraiser about the property value when you know that the appraised amount exceeds the actual FMV.

Usually, appraisal fees cannot be based on a percentage of the appraised value unless the fees were paid to certain not-for-profit associations. See Regulations section 1.170A-13(c)(6)(ii).

If the appraiser completed Part III of the December 2005 revision of Form 8283 and you file your return after February 16, 2007, you must get a statement signed by the appraiser that states: “I understand that a substantial or gross valuation misstatement resulting from the appraisal of the value of the property that I know, or reasonably should know, would be used in connection with a return or claim for refund, may subject me to the penalty under section 6695A.” Include this statement with your return. (If the appraiser completes Part III of the December 2006 revision of Form 8283, this statement is included in Part III.) If this applies to you and you e-file, mail the statement with Form 8453, U.S. Individual Income Tax Declaration for an IRS e-file Return, or Form 8453-OL, U.S. Individual Income Tax Declaration for an IRS e-file Online Return; you cannot sign your return electronically.

If the appraiser makes a separate declaration to satisfy requirement (3) on this page and the appraisal must be included with the return, follow the procedures described in the preceding paragraph to submit the separate declaration.

Identifying number.   The appraiser's taxpayer identification number (social security number or employer identification number) must be entered in Part III.

Part IV, Donee Acknowledgment

The donee organization that received the property described in Part I of Section B must complete Part IV. Before submitting page 2 of Form 8283 to the donee for acknowledgment, complete at least your name, identifying number, and description of the donated property (line 5, column (a)). If tangible property is donated, also describe its physical condition (line 5, column (b)) at the time of the gift. Complete Part II, if applicable, before submitting the form to the donee. See the instructions for Part II.

The person acknowledging the gift must be an official authorized to sign the tax returns of the organization, or a person specifically designated to sign Form 8283. After completing Part IV, the organization must return Form 8283 to you, the donor. You must give a copy of Section B of this form to the donee organization. You may then complete any remaining information required in Part I. Also, Part III may be completed at this time by the qualified appraiser.

In some cases, it may be impossible to get the donee's signature on Form 8283. The deduction will not be disallowed for that reason if you attach a detailed explanation why it was impossible.

Note.

If it is reasonable to expect that donated tangible personal property will be used for a purpose unrelated to the purpose or function of the donee, the donee should check the “yes” box in Part IV. In this situation, your deduction will be limited. In addition, if the donee (or a successor donee) organization disposes of the property within 3 years after the date the original donee received it, the organization must file Form 8282, Donee Information Return, with the IRS and send a copy to the donor. (As a result of the sale by the donee, the donor's contribution deduction may be limited or part of the prior year contribution deduction may have to be recaptured. See Pub. 526.) An exception applies to items having a value of $500 or less if the donor identified the items and signed the statement in Section B, Part II, of Form 8283. See the instructions for Part II.

Failure To File Form 8283

Your deduction generally will be disallowed if you fail to:

  • Attach a required Form 8283 to your return,

  • Get a required appraisal and complete Section B of Form 8283, or

  • Attach to your return a required appraisal of clothing or household items not in good used condition, an easement on a building in a registered historic district, or property for which you claimed a deduction of more than $500,000.

However, your deduction will not be disallowed if your failure was due to reasonable cause and not willful neglect or was due to a good-faith omission. If the IRS asks you to submit the form, you have 90 days to send a completed Section B of Form 8283 before your deduction is disallowed. However, your deduction will not be allowed if you did not get a required appraisal within the required period.

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