Non-Cash charitable donations: Is $5000+ FMV trigger per donation or per year?

Forum|Forum|1 year ago
April 26, 2024
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Suppose I have a collection of rare baseball cards that I want to donate to a qualified charity and claim a FMV of $12,000 on my return. My understanding is that, because this exceeds $5000, I need a professional appraisal. However, does that $5000 cutoff apply to the combined FMV of all like items I donate to the same charity over the course of the year, or only to a discrete donation of items on a particular date? If I break the cards into three groups with FMV of $4000 each and donate a group in June, August, and November and itemize these separately on my return, can I forego a professional appraisal, or will the IRS regard this as no different from donating them all at once with a $12k FMV?

Best answer by Opus 17

It's per tax return. If you show a tax return for 2024 with more than $5000 of non-cash donations, the IRS is going to take a closer look.

Opus 17Answer

Employee

It's per tax return. If you show a tax return for 2024 with more than $5000 of non-cash donations, the IRS is going to take a closer look.

pk12_2

Employee

@Davesilb , while agreeing with my colleague @Opus 17 , just wanted to add that available deduction for in-kind donations amount is the lower of the basis ( cost of acquisition plus other allowable costs ) and FMV at the time of donation. There is also AGI based limitations on charitable contributions recognition for the tax year. A very good source is IRS pub 526.

Opus 17

Employee

As noted, the amount you can claim as a deduction for items of tangible personal property that have increased in value is your original cost, not the current fair market value. The only time a donation of baseball cards would have a deductible value equal to the present fair market value is if you donated them to a museum or similar charity that would keep them as cards (keep and use them for their intended purpose) for their charitable purposes. If the charity is going to sell the items, your deduction value is limited to your original cost. You may be better off selling them yourself, reporting and paying the capital gains tax, and then donating some or all of the money.

And naturally, you would need records of your original cost if audited, and if you claim a value of more that $5000 even for the original cost and not the FMV, you need an appraisal. (The appraisal might say the current FMV is $15,000, but you would still only claim your cost if that was less.)

See publication 526, under "donations of property that have increased in value."

https://www.irs.gov/pub/irs-pdf/p526.pdf