Instructions for Form 8283 |
2006 Tax Year |
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.
Clothing and household items.
You cannot claim a deduction for clothing or household items you donate after August 17, 2006, unless the clothing
or household items are in good
used condition or better. See Clothing and household items on page 3 for an exception.
Taxidermy property.
Deductions for contributions of certain taxidermy property after July 25, 2006, are limited. See page 2.
Easements on buildings in historic districts.
New requirements apply to contributions of certain easements on buildings in registered historic districts. These
requirements include a new $500
filing fee that must be paid for each contribution of this type after February 12, 2007, if the claimed deduction is more
than $10,000. See page 3.
Appraisers.
New requirements apply to appraisals and appraisers. See Appraisal Requirements on page 5 and the Part III instructions on page 6. Also,
any appraiser who prepares an incorrect appraisal may have to pay the new penalty under section 6695A. See Form 8283, Section
B, Part III.
Recapture of certain deductions.
Part of the deduction for certain contributions of tangible personal property donated after September 1, 2006, will
be recaptured, or the amount of
the deduction limited, if the recipient organization sells the property within 3 years and does not certify its exempt use.
See page 2 and the
Note that begins on page 6.
Use Form 8283 to report information about noncash charitable contributions.
Do not use Form 8283 to report out-of-pocket expenses for volunteer work or amounts you gave by check or credit card. Treat
these items as cash
contributions. Also, do not use Form 8283 to figure your charitable contribution deduction. For details on how to figure the
amount of the deduction,
see your tax return instructions.
You must file Form 8283 if the amount of your deduction for all noncash gifts is more than $500. For this purpose, “amount of your deduction”
means your deduction before applying any income limits that could result in a carryover. The carryover rules are explained
in Pub. 526, Charitable
Contributions. Make any required reductions to fair market value (FMV) before you determine if you must file Form 8283. See
Fair Market Value
(FMV) beginning on page 2.
Form 8283 is filed by individuals, partnerships, and corporations.
Note.
C corporations, other than personal service corporations and closely held corporations, must file Form 8283 only if the amount
claimed as a
deduction is more than $5,000.
Partnerships and S corporations.
A partnership or S corporation that claims a deduction for noncash gifts of more than $500 must file Form 8283 with
Form 1065, 1065-B, or 1120S.
If the total deduction for any item or group of similar items is more than $5,000, the partnership or S corporation
must complete Section B of
Form 8283 even if the amount allocated to each partner or shareholder is $5,000 or less.
The partnership or S corporation must give a completed copy of Form 8283 to each partner or shareholder receiving
an allocation of the contribution
deduction shown in Section B of the Form 8283 of the partnership or S corporation.
Partners and shareholders.
The partnership or S corporation will provide information about your share of the contribution on your Schedule K-1
(Form 1065 or 1120S). If you
received a copy of Form 8283 from the partnership or S corporation, attach a copy to your tax return. Use the amount shown
on your Schedule K-1, not
the amount shown on the Form 8283, to figure your deduction.
If the partnership or S corporation is not required to give you a copy of its Form 8283, combine the amount of noncash
contributions shown on your
Schedule K-1 with your other noncash contributions to see if you must file Form 8283. If you need to file Form 8283, you do
not have to complete all
the information requested in Section A for your share of the partnership's or S corporation's contributions. Complete only
column (g) of line 1 with
your share of the contribution and enter “ From Schedule K-1 (Form 1065 or 1120S)” across columns (c)-(f).
File Form 8283 with your tax return for the year you contribute the property and first claim a deduction.
Which Sections To Complete
If you must file Form 8283, you may have to complete Section A, Section B, or both, depending on the type of property donated
and the amount
claimed as a deduction.
Section A.
Include in Section A only the following items.
-
Items (or groups of similar items as defined on page 2) for which you claimed a deduction of $5,000 or less per item (or group
of similar
items).
-
The following publicly traded securities even if the deduction is more than $5,000:
-
Securities listed on an exchange in which quotations are published daily,
-
Securities regularly traded in national or regional over-the-counter markets for which published quotations are available,
or
-
Securities that are shares of a mutual fund for which quotations are published on a daily basis in a newspaper of general
circulation
throughout the United States.
Section B.
Include in Section B only items (or groups of similar items) for which you claimed a deduction of more than $5,000.
Do not include publicly traded
securities reportable in Section A. With certain exceptions, items reportable in Section B require a written appraisal by
a qualified appraiser.
Similar Items of Property
Similar items of property are items of the same generic category or type, such as coin collections, paintings, books, clothing,
jewelry,
nonpublicly traded stock, land, or buildings.
Example.
You claimed a deduction of $400 for clothing, $7,000 for publicly traded securities (quotations published daily), and $6,000
for a collection of 15
books ($400 each). Report the clothing and securities in Section A and the books (a group of similar items) in Section B.
Special Rule for Certain C Corporations
A special rule applies for deductions taken by certain C corporations under section 170(e)(3) or (4) for certain contributions
of inventory or
scientific equipment.
To determine if you must file Form 8283 or which section to complete, use the difference between the amount you claimed as
a deduction and the
amount you would have claimed as cost of goods sold (COGS) had you sold the property instead. This rule is only for purposes
of Form 8283. It does not
change the amount or method of figuring your contribution deduction.
If you do not have to file Form 8283 because of this rule, you must attach a statement to your tax return (similar to the
one in the example
below). Also, attach a statement if you must complete Section A, instead of Section B, because of this rule.
Example.
You donated clothing from your inventory for the care of the needy. The clothing cost you $5,000 and your claimed charitable
deduction is $8,000.
Complete Section A instead of Section B because the difference between the amount you claimed as a charitable deduction and
the amount that would have
been your COGS deduction is $3,000 ($8,000 - $5,000). Attach a statement to Form 8283 similar to the following:
Form 8283—Inventory |
Contribution deduction
|
$8,000
|
|
COGS (if sold, not donated)
|
- 5,000
|
|
For Form 8283 filing purposes
|
=$3,000
|
|
Although the amount of your deduction determines if you have to file Form 8283, you also need to have information about the
FMV of your
contribution to complete the form.
FMV is the price a willing, knowledgeable buyer would pay a willing, knowledgeable seller when neither has to buy or sell.
You may not always be able to deduct the FMV of your contribution. Depending on the type of property donated, you may have
to reduce the FMV to
figure the deductible amount, as explained next.
Reductions to FMV.
The amount of the reduction (if any) depends on whether the property is ordinary income property or capital gain property.
Attach a statement to
your tax return showing how you figured the reduction.
Ordinary income property.
Ordinary income property is property that would result in ordinary income or short-term capital gain if it were sold
at its FMV on the date it was
contributed. Examples of ordinary income property are inventory, works of art created by the donor, and capital assets held
for 1 year or less. The
deduction for a gift of ordinary income property is limited to the FMV minus the amount that would be ordinary income or short-term
capital gain if
the property were sold.
Capital gain property.
Capital gain property is property that would result in long-term capital gain if it were sold at its FMV on the date
it was contributed. For
purposes of figuring your charitable contribution, capital gain property also includes certain real property and depreciable
property used in your
trade or business and, generally, held more than 1 year. However, to the extent of any gain from the property that must be
recaptured as ordinary
income under section 1245, section 1250, or any other Code provision, the property is treated as ordinary income property.
You usually may deduct gifts of capital gain property at their FMV. However, you must reduce the FMV by the amount
of any appreciation if any of
the following apply.
-
The capital gain property is contributed to certain private nonoperating foundations. This rule does not apply to qualified
appreciated
stock.
-
You choose the 50% limit instead of the special 30% limit for capital gain property.
-
The contributed property is intellectual property (as defined on page 3).
-
The contributed property is certain taxidermy property donated after July 25, 2006.
-
The contributed property is tangible personal property that is put to an unrelated use (as defined in Pub. 526) by the charity.
-
The contributed property is certain tangible personal property donated after September 1, 2006, with a claimed value of more
than $5,000 and
is sold, exchanged, or otherwise disposed of by the charity during the year in which you made the contribution, and the charity
has not made the
required certification of exempt use (such as on Form 8282, Part IV).
Qualified conservation contribution.
A qualified conservation contribution is a donation of a qualified real property interest, such as an easement, exclusively
for certain
conservation purposes. The donee must be a qualified organization as defined in section 170(h)(3) and must have the resources
to be able to monitor
and enforce the conservation easement or other conservation restrictions. To enable the organization to do this, you must
give it documents, such as
maps and photographs, that establish the condition of the property at the time of the gift.
If the donation has no material effect on the real property's FMV, or enhances rather than reduces its FMV, no deduction
is allowable. For example,
little or no deduction may be allowed if the property's use is already restricted, such as by zoning or other law or contract,
and the donation does
not further restrict how the property can be used.
The FMV of a conservation easement cannot be determined by applying a standard percentage to the FMV of the underlying
property. The best evidence
of the FMV of an easement is the sales price of a comparable easement. If there are no comparable sales, the before and after
method may be used.
Attach a statement that:
-
Identifies the conservation purposes furthered by your donation,
-
Shows, if before and after valuation is used, the FMV of the underlying property before and after the gift,
-
States whether you made the donation in order to get a permit or other approval from a local or other governing authority
and whether the
donation was required by a contract, and
-
If you or a related person has any interest in other property nearby, describes that interest.
If an appraisal is required, it must include the method of valuation (such as the income approach or the market data
approach) and the specific
basis for the valuation (such as specific comparable sales transactions).
Easements on buildings in historic districts.
You cannot claim a deduction for this type of contribution made after July 25, 2006, unless the contributed interest
includes restrictions
preserving the entire exterior of the building (including front, sides, rear, and height) and prohibiting any change to the
exterior of the building
inconsistent with its historical character. If you claim a deduction for this type of contribution in a tax year beginning
after August 17, 2006, you
must include with your return:
-
A qualified appraisal,
-
Photographs of the entire exterior of the building, and
-
A description of all restrictions on the development of the building.
If you donate this type of property after February 12, 2007, and claim a deduction of more than $10,000, your deduction will
not be allowed
unless you pay a $500 filing fee. See Form 8283-V and its instructions (available by March 2007).
For more information about qualified conservation contributions, see Pub. 526 and Pub. 561, Determining the Value
of Donated Property. Also see
section 170(h), Regulations section 1.170A-14, and Notice 2004-41. Notice 2004-41, 2004-28 I.R.B. 31, is available at
www.irs.gov/irb/2004-28_IRB/ar09.html.
Intellectual property.
The FMV of intellectual property must be reduced to figure the amount of your deduction, as explained on page 2. Intellectual
property means a
patent, copyright (other than a copyright described in section 1221(a)(3) or 1231(b)(1)(C)), trademark, trade name, trade
secret, know-how, software
(other than software described in section 197(e)(3)(A)(i)), or similar property, or applications or registrations of such
property.
However, you may be able to claim additional charitable contribution deductions in the year of the contribution and
later years based on a
percentage of the donee's net income, if any, from the property. The amount of the donee's net income from the property will
be reported to you on
Form 8899, Notice of Income From Donated Intellectual Property. See Pub. 526 for details.
Clothing and household items.
The FMV of used household items and clothing is usually much lower than when new. A good measure of value might be
the price that buyers of these
used items actually pay in consignment or thrift shops. You can also review classified ads in the newspaper or on the Internet
to see what similar
products sell for.
You cannot claim a deduction for clothing or household items you donate after August 17, 2006, unless the clothing
or household items are in good
used condition or better. However, you can claim a deduction for a contribution of an item of clothing or household item that
is not in good used
condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return.
Qualified Vehicle Donations
A qualified vehicle is any motor vehicle manufactured primarily for use on public streets, roads, and highways; a boat; or
an airplane. However,
property held by the donor primarily for sale to customers, such as inventory of a car dealer, is not a qualified vehicle.
If you donate a qualified vehicle with a claimed value of more than $500, you cannot claim a deduction unless you attach to
your return a copy of
the contemporaneous written acknowledgment you received from the donee organization. The donee organization may use Copy B
of Form 1098-C as the
acknowledgment. An acknowledgment is considered contemporaneous if the donee organization furnishes it to you no later than
30 days after the:
-
Date of the sale, if the vehicle was sold in an arm's length transaction to an unrelated party, or
-
Date of the contribution, if the vehicle will not be sold by the donee organization before completion of a material improvement
or
significant intervening use, or the vehicle will be given or sold to a needy individual for a price significantly below FMV
in direct furtherance of
the organization's charitable purpose of relieving the poor and distressed or underprivileged who are in need of a means of
transportation.
For a donated vehicle with a claimed value of more than $500, you can deduct the smaller of the vehicle's FMV on the date
of the contribution or
the gross proceeds received from the sale of the vehicle, unless an exception applies as explained below. Form 1098-C (or
other acknowledgment) will
show the gross proceeds from the sale if no exception applies. If the FMV of the vehicle was more than your cost or other
basis, you may have to
reduce the FMV to figure the deductible amount, as described under Reductions to FMV on page 2.
If any of the following exceptions apply, your deduction is not limited to the gross proceeds received from the sale. Instead,
you generally can
deduct the vehicle's FMV on the date of the contribution if the donee organization:
-
Makes a significant intervening use of the vehicle before transferring it,
-
Makes a material improvement to the vehicle before transferring it, or
-
Gives or sells the vehicle to a needy individual for a price significantly below FMV in direct furtherance of the organization's
charitable
purpose of relieving the poor and distressed or underprivileged who are in need of a means of transportation.
Form 1098-C (or other acknowledgment) will show if any of these exceptions apply. If the FMV of the vehicle was more than
your cost or other basis,
you may have to reduce the FMV to figure the deductible amount, as described under Reductions to FMV on page 2.
Determining FMV.
A used car guide may be a good starting point for finding the FMV of your vehicle. These guides, published by commercial
firms and trade
organizations, contain vehicle sale prices for recent model years. The guides are sometimes available from public libraries
or from a loan officer at
a bank, credit union, or finance company. You can also find used car pricing information on the Internet.
An acceptable measure of the FMV of a donated vehicle is an amount not in excess of the price listed in a used vehicle
pricing guide for a private
party sale of a similar vehicle. However, the FMV may be less than that amount if the vehicle has engine trouble, body damage,
high mileage, or any
type of excessive wear. The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a
private party sale only if
the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition,
with the same or
similar options or accessories, and with the same or similar warranties as the donated vehicle.
Example.
Neal donates his 1982 DeLorean DMC-12, which he bought new for $25,000. A used vehicle pricing guide shows the FMV for his
car is $9,950. Neal
receives a Form 1098-C showing the car was sold for $7,000. Neal can deduct $7,000 and must attach Form 1098-C to his return.
You may want to see Pub. 526 and Pub. 561. If you contributed depreciable property, see Pub. 544, Sales and Other Disposition
of Assets.
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