DONATION APPRAISALS

In the event that an object is to be gifted to an institution, foundation, etc., and the piece is accepted by the donees, an appraisal for tax purposes is required for items over $5,000 in value.

What is a qualified IRS donation appraisal?

Pall Mall Art Advisors provides IRS compliant donation appraisals that are delivered to clients with an 8283 tax form, and can be submitted to the IRS to obtain appropriate tax deductions. The appraisal document includes color digital images and full catalogue descriptions for each item, with values supported by appropriate market comparables.

Donations exceeding $50,000 are automatically reviewed by the IRS Art Advisory Panel so you want to be sure to work with a professional appraisal firm to avoid an audit.

PMAA Donation Appraisals include:

• Fair market value (FMV) of object(s)
• Full cataloguing of object(s)
• Discussion of the current marketplace
• Narrative outlining the details of the donees and appropriateness of the donation

What is related use?

According to the IRS tax code, in order for a donor of tangible personal property to be able to take full advantage of a tax benefit, the charity must use the object in a manner that is related to its exempt purpose. Examples would be a painting that is added to the collection of an art museum and a tall case clock created by a regional clock maker given to a historical society. [1]

Sources used to determine fair market value and to provide narrative specific to the donation:

• Auction market for assessment of current market for the particular artist and/or type of work being valued
• Auction house records from international auction houses using several databases that search more than 4,000 sellers and 58 million global records.
• Living artist and artist estates to confirm authenticity, editions, etc.
• International art fair reports
• Private collectors and advisors
• Over 100 contracted specialists familiar with global market pricing
• Review of the donee’s collection and donation policies

[1] IRS Publication 526 (Cat. No. 15050A) Charitable Contributions