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I purchased a land in August 2023, and decided to to donate the lot to a charity two month later.Can I get a tax deduction for the FMV of the land with form 8283 ?

Forum|Forum|2 years ago
October 7, 2023
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Best answer by Mike9241

The appraisal is needed if the land is valued at over $5K. However, for tax purposes since the land was held short-term it is what the code refers to as ordinary income property Your tax deduction is Fair Market Value reduced by the amount that would be ordinary income or short-term capital gain if sold at FMV. in short your deduction is the lesser of your cost or Fair Market Value.

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Bsch4477

Employee

Yes, if you itemize. You should have an appraisal to document the value of your donation.

M

Mike9241Answer

The appraisal is needed if the land is valued at over $5K. However, for tax purposes since the land was held short-term it is what the code refers to as ordinary income property Your tax deduction is Fair Market Value reduced by the amount that would be ordinary income or short-term capital gain if sold at FMV. in short your deduction is the lesser of your cost or Fair Market Value.

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alextargetnAuthor

Thank you for the comment. Could you elaborate a little more?

the land is assessed to be at 27k dollars but I paid 2800 dollars at county's tax sale.

what would be the tax deduction if I donate within a year?

How about if I held more than a year?

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Bsch4477

Employee

Do I understand that the value of the land is almost 10 times what you bought it for months ago? You might have a hard time convincing the IRS of that. Read the publication here and use your judgment about what to report or get professional advice.
https://www.irs.gov/pub/irs-pdf/p561.pdf