Bartlesville, OK asked in Estate Planning and Tax Law for Oklahoma

Q: Interpreting IRS rules for assigning value to in-kind contributions with a FMV of $500 or less

At 80, I am in the process donating several hundred American and European prints and a like number of Japanese woodblock prints, ranging in value from $100 to $12,000 each. Most are classified as "promised gifts" and are with the intended recipient, a 501(c) (3) tax-exempt, fully accredited, fine art museum at a midwestern university. I plan to begin donating portions of my collection in the upcoming tax year, starting with those individual works of art with a FMV of $500 or less. It is also my intention to assign that value. Donating 200 prints at an average value of $300 totals $60,000 and is equal to 30% of my income. Can I do this?

By donating the lesser valued first, I save the expense of an appraiser and since my entire estate is going to charity, no appraisal will be necessary upon my death.

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2 Lawyer Answers
James Tack Jr
James Tack Jr
  • Oklahoma City, OK
  • Licensed in Oklahoma

A: There is an appraisal requirement for all gifts in excess of $5000. That applies to where you give similar items of property where the total value is above $5,000. Six $1,000 items donated would reqire an appraisal. If you haven't already, you will want to contact the fine art museum to make sure they will accept your gifts without an intention of selling them. They may also be able to assit you in your gifting plans. With gifts this size, you should consult with an attorney who specializes in estate planning.

Steven J. Fromm agrees with this answer

Steven J. Fromm
Steven J. Fromm
  • Estate Planning Lawyer
  • Philadelphia, PA

A: Usually in these cases, the recipient organization will provide a qualified appraiser. It would be surprising if they will not do this. This would save the costs to have these items appraised.

As to the 30%, yes that is the limit for capital gain type of property donated. There is an election to use 50% but the trade-off is that the gift will have to be reduced for appreciation. This generally is not more advantageous but your tax attorney or CPA should "run" the numbers to be sure.

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