valued at more than $5,000, you must obtain a
qualified appraisal and complete a Form 8283.
Gems and jewelry. Gems and jewelry are
of such a specialized nature that it is almost al-
ways necessary to get an appraisal by a speci-
alized jewelry appraiser. The appraisal should
describe, among other things, the style of the
jewelry, the cut and setting of the gem, and
whether it is now in fashion. The stone's color-
ing, weight, cut, brilliance, and flaws should be
reported and analyzed. Sentimental personal
value has no effect on FMV. But if the jewelry
was owned by a famous person, its value might
increase. GIA certificates and color photos
should be included in jewelry appraisals.
Stamp collections. Most libraries have
catalogs or other books that report the publish-
er's estimate of values. Generally, two price lev-
els are shown for each stamp: the price post-
marked and the price not postmarked. Contact
an appraiser for assistance with properly valu-
ing stamp collections.
Coin collections. Many catalogs and other
reference materials show the writer's or publish-
er's opinion of the value of coins on or near the
date of the publication. Like many other collec-
tors' items, the value of a coin depends on the
demand for it, its age, and its rarity. Another im-
portant factor is the coin's condition. For exam-
ple, there is a great difference in the value of a
coin that is in mint condition and a similar coin
that is only in good condition.
Use caution when consulting price guides
for coins as only a trained grader can distin-
guish the difference between various Mint State
grades and circulated grades including ex-
tremely fine, very fine, fine, very good, good,
fair, or poor. The difference in value between
one grade and another could be vast.
Books. The value of books is usually deter-
mined by selecting comparable sales and ad-
justing the prices according to the differences
between the comparable sales and the item be-
ing evaluated. This can be difficult to do and,
except for a collection of little value, should be
done by a specialized appraiser.
Modest value of collection. If the collec-
tion you are donating is of modest value, not re-
quiring a written appraisal, the following infor-
mation may help you in determining the FMV.
A book that is very old, or very rare, is not
necessarily valuable. There are many books
that are very old or rare, but that have little or no
market value.
Condition of book. The condition of a
book may have a great influence on its value.
Collectors are interested in items that are in
fine, or at least good, condition. When a book
has a missing page, a loose binding, tears, or
stains, or is otherwise in poor condition, its
value is greatly lowered.
Other factors. Some other factors in the
valuation of a book are the kind of binding
(leather, cloth, paper), page edges, and illustra-
tions (drawings and photographs). Collectors
usually want first editions of books. However,
because of changes or additions, other editions
are sometimes worth as much as, or more than,
the first edition.
Manuscripts, autographs, diaries, and
similar items. When these items are hand-
written, or at least signed by famous people,
they are often in demand and are valuable.
However, the noteworthiness of an author is not
the only determining factor; the writings of un-
known or obscure authors may also be of value
if they are of unusual historical or literary impor-
tance. Determining the value of such material is
difficult. For example, there may be a great dif-
ference in value between two diaries that were
kept by a famous person—one kept during
childhood and the other during a later period in
their life. The appraiser determines a value in
these cases by applying knowledge and judg-
ment to such factors as comparable sales and
market conditions.
Cars, Boats, and Aircraft
If you donate a car, a boat, or an aircraft to a
charitable organization, its FMV must be deter-
mined.
Certain commercial firms and trade organi-
zations publish monthly or seasonal guides for
different regions of the country, containing com-
plete dealer sale prices or dealer average pri-
ces for recent model years. Prices are reported
for each make, model, and year. These guides
also provide estimates for adjusting for unusual
equipment, unusual mileage, and physical con-
dition. The prices are not “official,” and these
publications are not considered an appraisal of
any specific donated property. But they do pro-
vide clues for making an appraisal and suggest
relative prices for comparison with current sales
and offerings in your area.
These publications are sometimes available
from public libraries or at a bank, credit union,
or finance company. You can also find pricing
information about used cars on the Internet.
An acceptable measure of the FMV of a do-
nated car, boat, or airplane is an amount not in
excess of the price listed in a used vehicle pric-
ing guide for a private party sale, not the dealer
retail value, of a similar vehicle. However, the
FMV may be less than that amount if the vehicle
has engine trouble, body damage, high mile-
age, 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 condi-
tion, with the same or similar options or acces-
sories, and with the same or similar warranties
as the donated vehicle.
Example. You donate a used car in poor
condition to a local high school for use by stu-
dents studying car repair. A used car guide
shows the dealer retail value for this type of car
in poor condition is $1,600. However, the guide
shows the price for a private party sale of the
car is only $750. The FMV of the car is consid-
ered to be no more than $750.
Boats. Except for inexpensive small boats, the
valuation of boats should be based on an ap-
praisal by a marine surveyor because the physi-
cal condition is so critical to the value.
More information. Your deduction for a dona-
ted car, boat, or airplane is generally limited to
the gross proceeds from its sale by the qualified
organization. This rule applies if the claimed
value of the donated vehicle is more than $500.
In certain cases, you can deduct the vehicle's
FMV. For details, see Pub. 526.
Inventory
If you donate any inventory item to a charitable
organization, the amount of your deductible
contribution is generally the FMV of the item,
minus any gain you would have realized if you
had sold the item at its FMV on the date of the
gift. For more information, see Pub. 526.
Patents
To determine the FMV of a patent, you must
take into account, among other factors:
•
Whether the patented technology has
been made obsolete by other technology;
•
Any restrictions on the donee's use of, or
ability to transfer, the patented technology;
and
•
The length of time remaining before the
patent expires.
However, your deduction for a donation of a
patent or other intellectual property is its FMV,
minus any gain you would have realized if you
had sold the property at its FMV on the date of
the gift. Generally, this means your deduction is
the lesser of the property's FMV or its basis. For
details, see Pub. 526.
Stocks and Bonds
The value of stocks and bonds is the FMV of a
share or bond on the valuation date. See Date
of contribution, earlier, under What Is Fair Mar-
ket Value (FMV)?
Selling prices on valuation date. If there is
an active public market for the contributed
stocks or bonds on a stock exchange, in an
over-the-counter market, or elsewhere, the FMV
of each share or bond is the average price be-
tween the highest and lowest quoted selling pri-
ces on the valuation date. For example, if the
highest selling price for a share was $11 and
the lowest $9, the average price is $10. You get
the average price by adding $11 and $9 and di-
viding the sum by 2.
No sales on valuation date. If there were
no sales on the valuation date, but there were
sales within a reasonable period before and af-
ter the valuation date, you determine FMV by
taking the average price between the highest
and lowest sales prices on the nearest date be-
fore and on the nearest date after the valuation
date. Then you weight these averages in in-
verse order by the respective number of trading
days between the selling dates and the valua-
tion date.
Example. On the day you gave stock to a
qualified organization, there were no sales of
the stock. Sales of the stock nearest the valua-
tion date took place 2 trading days before the
valuation date at an average selling price of $10
and 3 trading days after the valuation date at an
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