Tax Law (Questions About Taxes)/charitable donations


QUESTION: I have some unique valuable  (art) items I would like to donate to a charity or museum.  How would I go about doing this so it would be acceptable to the IRS as a deduction? Thanks.

ANSWER: Frank,

Thanks for your question.

There are several variables involved.  Your deduction will be either the fair market value or your cost basis, depending on the circumstances.  If you have not owned the property for more than 12 months, your deduction is limited to your cost basis.  Likewise, if the charity does not use it for their exempt purpose (such as an art museum displaying art works) your deduction is limited to your cost basis.  If you have owned it more than 12 months and the organization is going to use it in its exempt purpose, you can deduct the fair market value.

If the items are valued at more than $5,000 you will need an appraisal (cost of the appraisal is deductible) of their value attached to the return.  If under $5,000 you do not need an appraisal, but you should keep for your records how you arrived at the value of the contribution.

Hope this helps.

John Stancil, CPA

---------- FOLLOW-UP ----------

QUESTION: thanks so much John. In follow up - I actually have no use for the tax deduction as I have very little income to claim it against. But, can I transfer it to a relative in exchange for something of value (say, the use of part of their land) and they could get the deduction if they held it for more than a year.

If you transfer it to a relative, it would have to be for value.  You could not transfer a $10,000 asset for something worth $1,000, for example.  Any difference in the value of the exchange between related parties would be treated as a gift.

An outright gift to a relative might be a solution, as they would receive your basis and holding period so they would not have to wait a year.  This would likely involve you having to file a gift tax return, but there would not likely be any gift tax involved.

One thing about a gift in either scenario.  In order for it to be a valid gift, you must relinquish all control.  So you can't give it to them and specify that that donate it to Charity X. If you gave it to them and they sold it or did something else with it, there would be nothing you could do about it.

Hope this helps.

John Stancil, CPA

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John Stancil, CPA


I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at I also offer seminars and consultations to churches and clergy on their tax issues at Also visit my blog, I am listed on Tax Connections at Prepare and file your own taxes at


I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

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