Client is giving a collection of books to the state university. Books are worth approx $60,000. He has a written letter or some sort of opinion of the worth, and the university will sign on the acknowledgement. On Part III, declaration of appraiser - is that required to be signed? Instructions have some options, but I can't seem to get it clear in my head. Client said the appraiser would not be available to sign, is that going to void the donation? How likely is this return to be audited? Client and wife are w-2 employees and file a Sch A because of house interest. There are no other flags or items of interest on return. I've looked at the AMT form, but see no lines for preference items of contributions. Have I missed something? I need some guidance and advice of what else to require or ask of client. Can anyone help me?
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Non-cash donation
On that large amount all the i's have to be dotted and all the t's have to be crossed.
I would insist on an official appraisal, not just a letter from the university.
Without that, and the form being signed, no deduction.Jiggers, EA -
Go look at pub 561, beginning on page 9. The form must be filled out and signed. And, the apprasial must be from a qualified appraiser. Your client may have a problem.You have the right to remain silent. Anything you say will be misquoted, then used against you.Comment
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If I remember right
all non-cash donations in excess of $5,000 require an appraisal [that dollar amount may be incorrect because right not I am too lazy to go and look it up :-) ].
And, the appraiser must be a qualified appraiser, i.e., qualified in that particular field. Normally the appraiser will include a letter/document denoting the circumstances of the appraisal, along with his/her qualifications. That should be copied and retained in the file.Just because I look dumb does not mean I am not.Comment
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Book donation
Being a retired librarian I would be skeptical of such a donation without a appraisal from a qualified person. The American Library Association or the American Booksellers Association could provide leads on who to get for a qualfied appraisal. Often indidivuals have a warpedsense of the value of their possessions.Comment
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I'm shocked!
You mean... GASP!! that some people inflate the value of that used pair of underware they donated to Goodwill?Sandy >^..^<Comment
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They must be
independently wealthy to give such a generous gift in times like these.Comment
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My 2¢ worth
If I'm going to sign my name on a tax return showing used books with a value of $60k, you better believe someone else's knowledge/signature is going to have to attest to that value.
Short of historical/rare books or something like a book signed by a famous author, have you (and client) ever seen what used books actually sell for at Goodwill or yard sales? ("But that is a thirty year collection of classic National Geographic magazines" he said.....)
FEComment
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$60,000.00
You, of course, need to protect yourself. Don't listen to the client here....do it the right way.This posting is for general discussion purposes and is not meant to be reliable tax advice.Comment
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This return has a high probability of being audited. CYA.Comment
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Had a client
who owned a horse. During the tax year she called and inquired about donating the horse. It was unable to compete in whatever horse activity and was no longer useful to the tax payer.
At tax time the horse became worth $50,000!
Amazing!
Be sure to give the appraiser a copy of Circular 230 for his or her edification.Comment
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Values
Aren't all donor values "subjective" - their own perspective?
I dislike the form 8283 and all charitable contribution deductions claimed by taxpayers
In this case from the OP - CYA - obtain the proper appraisal since value appears to be over $ 5K. The taxpayer needs to comply with the regulations set forth in order to claim a deduction. Would it even be a possiblity from the OP post that the taxpayer has an appreciated value, as well? Is the $60K the t/p actual cost basis of the property that he might be donating?
SandyComment
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I'll pile on with everyone else here. Hand the client the 8283 and the pub, with the relevant paragraphs highlighted. Tell them to bring the 8283 back with the proper information (including believable and verifiable info on the qualifications of the appraiser) and you'll proceed. No documentation, no tax preparation.Last edited by JohnH; 12-13-2009, 06:56 PM."The only function of economic forecasting is to make astrology look respectful" - John Kenneth GalbraithComment
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Agree with this
because the size of the valuation simply wipes away all other considerations.
This client doesn't need any other flags or items of interest to gather attention -- $60K for books is quite enough by itself and should make an IRS computer jump the tracks. I can't imagine the return would NOT be audited unless you had a very highly-qualified appraisal accompanying it (certainly more than the opinion of a state university librarian).
It's possible their guy "would not be available to sign" because they know the 8283 levies appraiser penalties for value overstatement and tax understatement. Or maybe a qualified person is simply not available at a price they can afford. But anyway the instructions say you must have an appraisal.
These are interesting cases. Years ago (before 8283s) I had a client donate $4K books to the University of Mississippi and it went okay with just the head librarian's affadavit, but I wouldn't expect such easy treatment here. If you take the case, then maybe put them off until April to avoid an audit during tax season.Comment
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Thanks for all the imput. I've copied and highlighted all these items for the TP. The university signs on the bottom, is that his acknowledgement? Does he need a statement saying no goods or services........? Or is that only on cash donations?Comment
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