PDF document

- 1 -

                Userid: CPM                 Schema: tipx         Leadpct: 100% Pt. size: 8          Draft               Ok to Print
AH XSL/XML      Fileid: … ons/p561/202301/a/xml/cycle06/source                                   (Init. & Date) _______

Page 1 of 15                                                                                     19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

           Publication 561
           (Rev. January 2023)                                                 Contents
           Cat. No. 15109Q                                                     Future Developments           . . . . . . . . . . . . 1
Department 
of the                                                                         Introduction . . . . . . . . . . . . . . . . . . 1
Treasury
Internal   Determining                                                         What Is Fair Market Value (FMV)? . . . . . 2
Revenue 
Service                                                                        Valuation of Various Kinds of 
           the Value of                                                        Property            . . . . . . . . . . . . . . . . . 4
                                                                               Substantiation of Noncash 
           Donated                                                             Charitable Contributions                . . . . . . . 8
                                                                               Penalty     . . . . . . . . . . . . . . . . . . . .   11
           Property
                                                                               How To Get Tax Help           . . . . . . . . . . .   11
                                                                               Index       . . . . . . . . . . . . . . . . . . . . . 15

                                                                               Future Developments
                                                                               For  the  latest  information  about  developments 
                                                                               related to Pub. 561, such as legislation enacted 
                                                                               after it was published, go to IRS.gov/Pub561.

                                                                               Introduction
                                                                               This publication is designed to help donors and 
                                                                               appraisers  determine  the  value  of  property 
                                                                               (other  than  cash)  that  is  given  to  qualified  or-
                                                                               ganizations. It also explains what kind of infor-
                                                                               mation you must have to support the charitable 
                                                                               contribution deduction you claim on your return.
                                                                               This publication does not discuss how to fig-
                                                                               ure the amount of your deduction for charitable 
                                                                               contributions or written records and substantia-
                                                                               tion required. See Pub. 526, Charitable Contri-
                                                                               butions, for this information.
                                                                               Comments  and  suggestions.               We  welcome 
                                                                               your comments about this publication and sug-
                                                                               gestions for future editions.
                                                                               You  can  send  us  comments  through 
                                                                               IRS.gov/FormComments.  Or,  you  can  write  to 
                                                                               the  Internal  Revenue  Service,  Tax  Forms  and 
                                                                               Publications,  1111  Constitution  Ave.  NW, 
                                                                               IR-6526, Washington, DC 20224.
                                                                               Although  we  can’t  respond  individually  to 
                                                                               each comment received, we do appreciate your 
                                                                               feedback and will consider your comments and 
                                                                               suggestions as we revise our tax forms, instruc-
                                                                               tions,  and  publications.      Don’t  send  tax  ques-
                                                                               tions, tax returns, or payments to the above ad-
                                                                               dress.
                                                                               Getting  answers  to  your  tax  questions. 
                                                                               If you have a tax question not answered by this 
                                                                               publication or the      How To Get Tax Help section 
                                                                               at the end of this publication, go to the IRS In-
                                                                               teractive  Tax  Assistant  page  at             IRS.gov/
                                                                               Help/ITA where you can find topics by using the 
                                                                               search feature or viewing the categories listed.
                                                                               Getting tax forms, instructions, and pub
                                                                               lications.      Go  toIRS.gov/Forms  to  download 
                                                                               current  and  prior-year  forms,  instructions,  and 
              Get forms and other information faster and easier at:            publications.
              • IRS.gov (English)         • IRS.gov/Korean (한국어) 
              • IRS.gov/Spanish (Español) • IRS.gov/Russian (Pусский)          Ordering  tax  forms,  instructions,  and 
              • IRS.gov/Chinese (中文)      • IRS.gov/Vietnamese (Tiếng Việt)    publications.       Go  to    IRS.gov/OrderForms  to 
                                                                               order       current     forms,      instructions,     and 

Mar 9, 2023

- 2 -

Page 2 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

publications; call 800-829-3676 to order Date of contribution. Ordinarily, the date of a less weight if the property was not bought or
prior-year forms and instructions. The IRS will contribution is the date on which the property is sold at a time that is reasonably close to the
process your order for forms and publications delivered to the charity, provided you do not re- date of contribution.
as soon as possible. Don’t resubmit requests tain any right to or interest in the property that
you’ve already sent us. You can get forms and would limit the charity's use of the property. The cost or selling price is a good indication
publications faster online. of the property's value if:
Stock. If you deliver, without any condi- • The purchase or sale took place close to
tions, a properly endorsed stock certificate to a the valuation date in an open market,
Useful Items qualified organization or to an agent of the or- • The purchase or sale was at
You may want to see: ganization, the date of the contribution is the “arm's-length,”
date of delivery. If the certificate is mailed and • The buyer and seller knew all relevant
Publication received through the regular mail, it is the date facts,
526 526 Charitable Contributions of mailing. If you deliver the certificate to a bank • The buyer and seller did not have to act,
or broker acting as your agent or to the issuing and
Forms (and Instructions) corporation or its agent, for transfer into the • The market did not change between the
name of the organization, the date of the contri- date of purchase or sale and the valuation
8282 8282 Donee Information Return bution is the date the stock is transferred on the date.
8283 8283 Noncash Charitable Contributions books of the corporation.
8283-V 8283-V Payment Voucher for Filing Fee Options. If you grant an option to a quali- Example. Bailey Morgan, who is not a
Under Section 170(f)(13) fied organization to buy real property, you have dealer in gems, bought an assortment of gems
See How To Get Tax Help near the end of this not made a charitable contribution until the or- for $5,000 from a promoter. The promoter
publication for information about getting these ganization exercises the option. The amount of claimed that the price was “wholesale” even
publications and forms. the contribution is the FMV of the property on though this dealer and other dealers made simi-
the date the option is exercised minus the exer- lar sales at similar prices to other persons who
cise price. were not dealers. The promoter said that if Bai-
ley kept the gems for more than 1 year and then
What Is Fair Market Example. You grant an option to a local gave them to charity, Bailey could claim a chari-
Value (FMV)? university, which is a qualified organization, to table deduction of $15,000, which, according to
buy real property. Under the option, the univer- the promoter, would be the value of the gems at
To figure how much you may deduct for prop- sity could buy the property at any time during a the time of contribution. Bailey gave the gems
erty that you contribute, you must first deter- 2-year period for $40,000. The FMV of the prop- to a qualified charity 13 months after buying
mine its FMV on the date of the contribution. erty on the date the option is granted is them.
This publication focuses the valuation of non- $50,000. The selling price for these gems had not
cash property being contributed after January In the following tax year, the university exer- changed from the date of purchase to the date
1, 2019, to a charity that qualifies under section cises the option. The FMV of the property on Bailey donated them to charity. The best evi-
170(c) for an income tax charitable contribution the date the option is exercised is $55,000. dence of FMV depends on actual transactions
deduction. Therefore, you have made a charitable contri- and not on some artificial estimate. The $5,000
bution of $15,000 ($55,000, the FMV, minus charged Bailey and others is, therefore, the
FMV. FMV is the price that property would sell $40,000, the exercise price) in the tax year the best evidence of the maximum FMV of the
for on the open market. It is the price that would option is exercised. gems.
be agreed on between a willing buyer and a Terms of the purchase or sale. The terms of
willing seller, with neither being required to act, Determining FMV the purchase or sale should be considered in
and both having reasonable knowledge of the determining FMV if they influenced the price.
relevant facts. In addition to this general rule, Determining the value of donated property These terms include any restrictions, under-
there are special rules used to value certain would be a simple matter if you could rely only standings, or covenants limiting the use or dis-
types of property such as remainder interests, on fixed formulas, rules, or methods. Usually, it position of the property.
annuities, interests for life or for a term of years, is not that simple. Using such formulas, etc.,
and reversions, discussed below. seldom results in an acceptable determination Rate of increase or decrease in value. Un-
of FMV. There is no single formula that always less you can show that there were unusual cir-
Example 1. If you give an item of used applies when determining the value of property. cumstances, it is assumed that the increase or
clothing that is in good used condition or better decrease in the value of your donated property
to the Salvation Army, the FMV would be the This is not to say that a valuation is only from your cost has been at a reasonable rate.
price that typical buyers actually pay for clothing guesswork. You must consider all the facts and For time adjustments, an appraiser may con-
of this age, condition, style, and use. Usually, circumstances connected with the property, sider published price indexes for information on
such items are worth far less than what you such as its desirability, use, and scarcity. general price trends, building costs, commodity
paid for them. costs, securities, and works of art sold at auc-
For example, donated furniture that is in
Example 2. If you donate land and restrict good used condition or better should not be tion in arm's-length sales.
its use to agricultural purposes, you must value evaluated at some fixed rate such as 15% of the
the land at its value for agricultural purposes, cost of new replacement furniture. When the Example. Corey Brown bought a painting
even if it would have a higher FMV if it were not furniture is contributed, it may be out of style or for $10,000. Thirteen months later, Corey gave
restricted. in poor condition, therefore having little or no it to an art museum, claiming a charitable de-
market value. On the other hand, it may be a duction of $15,000 on their tax return. The ap-
Factors. In making and supporting the val- desirable antique, the value of which could not praisal of the painting should include informa-
uation of property, all factors affecting value are be determined by using any formula. tion showing that there were unusual
relevant and must be considered. These in- circumstances that justify a 50% increase in
value for the 13 months Corey held the prop-
clude, but are not limited to: Cost or Selling Price of the erty.
• The cost or selling price of the item, Donated Property
• Sales of comparable properties,
Arm's-length offer. An arm's-length offer to
• Replacement cost, and The cost of the property to you or the actual buy the property close to the valuation date may
• Opinions of experts. selling price received by the qualified organiza- help to prove its value if the person making the
These factors are discussed later. Also, see tion may be the best indication of its FMV. How- offer was willing and able to complete the trans-
Table 1 for a summary of questions to ask as ever, because conditions in the market change, action. To rely on an offer, you should be able
you consider each factor. the cost or selling price of property may have
Page 2 Publication 561 (January 2023)

- 3 -

Page 3 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

Table 1. Factors That Affect FMV Opinions of Experts
IF the factor you are Generally, the weight given to an expert's opin-
considering is... THEN you should ask these questions... ion on matters such as the authenticity of a coin
or a work of art, or the most profitable and best
cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? use of a piece of real estate, depends on the
Was any increase or decrease in value, as compared to your cost, at a reasonable knowledge and competence of the expert and
rate? the thoroughness with which the opinion is sup-
Do the terms of purchase or sale limit what can be done with the property? ported by experience and facts. For an expert's
Was there an arm's-length offer to buy the property close to the valuation date? opinion to deserve much weight, the facts must
support the opinion. For additional information,
sales of comparable How similar is the property sold to the property donated? see Appraisal, later.
properties How close is the date of sale to the valuation date?
Was the sale at arm's-length? Problems in Determining
What was the condition of the market at the time of sale?
FMV
replacement cost What would it cost to replace the donated property? There are a number of problems in determining
Is there a reasonable relationship between replacement cost and FMV? the FMV of donated property.
Is the supply of the donated property more or less than the demand for it?

opinions of experts Is the expert knowledgeable and competent? Unusual Market Conditions
Is the opinion thorough and supported by facts and experience?
The sale price of the property itself in an
to show proof of the offer and the specific said that if Quinn wanted a charitable deduction arm's-length transaction in an open market is
amount to be paid. Offers to buy property other within 1 year of the purchase, Quinn could buy often the best evidence of its value. When you
than the donated item will help to determine the 500 books at the “retail” price of $30,000, rely on sales of comparable property, the sales
value if the other property is reasonably similar paying only $10,000 in cash and giving a prom- must have been made in an open market. If
to the donated property. issory note for the remaining $20,000. The prin- those sales were made in a market that was ar-
cipal and interest on the note would not be due tificially supported or stimulated so as not to be
Sales of Comparable Properties for 12 years. According to the promoter, Quinn truly representative, the prices at which the
could then, within 1 year of the purchase, give sales were made will not indicate the FMV.
the books to a qualified organization and claim
The sales prices of properties similar to the do- the full $30,000 retail price as a charitable con- For example, liquidation sale prices usually
nated property are often important in determin- tribution. Quinn purchased the books under the do not indicate the FMV. Also, sales of stock
ing the FMV. The weight to be given to each second option and, 3 months later, gave them under unusual circumstances, such as sales of
sale depends on the following. to a house of worship, which will use the books small lots, forced sales, and sales in a restricted
• The degree of similarity between the prop- for religious purposes. market, may not represent the FMV.
erty sold and the donated property. At the time of the gift, the promoter was sell-
• The time of the sale—whether it was close ing similar lots of books for either $10,000 or Selection of Comparable Sales
to the valuation date. $30,000. The difference between the two prices
• The circumstances of the sale—whether it was solely at the discretion of the buyer. The Using sales of comparable property is an impor-
was at arm's-length with a knowledgeable promoter was a willing seller for $10,000. tant method for determining the FMV of dona-
buyer and seller, with neither having to act. Therefore, the value of Quinn’s contribution of ted property. However, the amount of weight
• The conditions of the market in which the the books is $10,000, the amount at which simi- given to a sale depends on the degree of simi-
sale was made—whether unusually infla- lar lots of books could be purchased from the larity between the comparable and the donated
ted or deflated. promoter by members of the general public. properties. The degree of similarity must be
The comparable sales method of valuing real close enough so that this selling price would
have been given consideration by reasonably
estate is explained later under Valuation of Vari- Replacement Cost well-informed buyers or sellers of the property.
ous Kinds of Property.
Example 1. Quinn Black, who is not a book The cost of buying, building, or manufacturing Example. You give a rare, old book to your
dealer, paid a promoter $10,000 for 500 copies property similar to the donated item should be former college. The book is a third edition and is
of a single edition of a modern translation of a considered in determining FMV. However, there in poor condition because of a missing back
religious book. The promoter had claimed that must be a reasonable relationship between the cover. You discover that there was a sale for
the price was considerably less than the “retail” replacement cost and the FMV. $300, near the valuation date, of a first edition
price and gave Quinn a statement that the of the book that was in good condition. Al-
books had a total retail value of $30,000. The The replacement cost is the amount it would though the contents are the same, the books
promoter advised that if Quinn kept the books cost to replace the donated item on the valua- are not at all similar because of the different edi-
for more than 1 year and then gave them to a tion date. Often, there is no relationship be- tions and their physical condition. Little consid-
qualified organization, Quinn could claim a tween the replacement cost and the FMV. If the eration would be given to the selling price of the
charitable deduction for the “retail” price of supply of the donated property is more or less $300 property by knowledgeable buyers or sell-
$30,000. Thirteen months later, all the books than the demand for it, the replacement cost ers.
were given to a house of worship from a list pro- becomes less important.
vided by the promoter. At the time of the dona- Future Events
tion, wholesale dealers were selling similar To determine the replacement cost of the
quantities of books to the general public for donated property, find the “estimated replace- You may not consider unexpected events hap-
$10,000. ment cost new.” Then subtract from this figure pening after your donation of property in making
The FMV of the books is $10,000, the price an amount for depreciation due to the physical the valuation. You may consider only the facts
at which similar quantities of books were being condition and obsolescence of the donated known at the time of the gift, and those that
sold to others at the time of the contribution. property. You should be able to show the rela- could reasonably be expected at the time of the
tionship between the depreciated replacement gift.
Example 2. The facts are the same as in cost and the FMV, as well as how you arrived at
Example 1, except that the promoter gave the “estimated replacement cost new.” Example. You give farmland to a qualified
Quinn Black a second option. The promoter charity. The transfer provides that your mother
Publication 561 (January 2023) Page 3

- 4 -

Page 4 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

will have the right to all income and full use of Used Clothing portal and you should submit the payment
the property for her life. Even though your confirmation with your Statement of Value
mother dies 1 week after the transfer, the value Used clothing and other personal items are request.
of the property on the date it is given is its usually worth far less than the price you paid for • A completed Form 8283, Section B.
present value, subject to the life interest as esti- them. Valuation of items of clothing does not • The location of the IRS territory that has
mated from actuarial tables. You may not take a lend itself to fixed formulas or methods. examination responsibility for your return.
higher deduction because the charity received If your request lacks essential information, you
full use and possession of the land only 1 week The price that buyers of used items actually
after the transfer. pay in used clothing stores, such as consign- will be notified and given 30 days to provide the
ment or thrift shops, is an indication of the missing information.
value. Send your request to:
Using Past Events to Predict the
Future You can't take an income tax charitable con- Internal Revenue Service/Appeals
tribution deduction for an item of clothing unless Attn: Art Appraisal Services
A common error is to rely too much on past it is in good used condition or better. An item of Request for Statement of Value
events that do not fairly reflect the probable fu- clothing that is not in good used condition or 1111 Constitution Ave. NW, Room 3615
ture earnings and FMV. better for which you claim an income tax chari- Washington, DC 20224–0002
table contribution deduction of more than $500
Example. You give all your rights in a suc- requires a qualified appraisal and a completed Refunds. You can withdraw your request
cessful patent to your favorite charity. Your re- Form 8283. See Deduction over $500 for cer- for a Statement of Value at any time before it is
cords show that before the valuation date there tain clothing or household items, later. issued. However, the IRS will not refund the
were three stages in the patent's history of user fee if you do.
earnings. First, there was rapid growth in earn- If the IRS declines to issue a Statement of
ings when the invention was introduced. Then, Jewelry and Gems
Value in the interest of efficient tax administra-
there was a period of high earnings when the in- tion, the IRS will refund the user fee.
vention was being exploited. Finally, there was Jewelry and gems are of such a specialized na-
a decline in earnings when competing inven- ture that it is almost always necessary to get an
tions were introduced. The entire history of appraisal by a specialized jewelry appraiser. Authenticity. It is helpful if the authenticity of
earnings may be relevant in estimating the fu- The appraisal should describe, among other the donated art has been determined. To deter-
ture earnings. However, the appraiser must not things, the style of the jewelry, the cut and set- mine who is an appropriate expert competent to
rely too much on the stage of rapid growth in ting of the gem, and whether it is now in fash- authenticate an object of art depends upon the
earnings or of high earnings. The market condi- ion. If not in fashion, the possibility of having the type of object and the creator of that object. The
tions at those times do not represent the condi- property redesigned, recut, or reset should be appraiser is responsible for performing due dili-
tion of the market at the valuation date. What is reported in the appraisal. The stone's coloring, gence regarding authentication for the donated
most significant is the trend of decline in earn- weight, cut, brilliance, and flaws should be re- art.
ings up to the valuation date. For more informa- ported and analyzed. Sentimental personal
tion about donations of patents, see Patents, value has no effect on FMV. But if the jewelry Physical condition. Important factors in the
later. was owned by a famous person, its value might valuation of antiques and art are physical condi-
increase. tion and extent of restoration. These have a sig-
nificant effect on the value and must be fully re-
ported in an appraisal. An antique in damaged
Valuation of Various Paintings, Antiques, and condition, or lacking the “original brasses,” may
Other Objects of Art be worth much less than a similar piece in ex-
Kinds of Property cellent condition.
Your income tax charitable contribution dona-
This section contains information on determin- tion of paintings, antiques, and other objects of
ing the FMV of ordinary kinds of donated prop- art, for which you claim a deduction of more Collectibles
erty. For information on appraisals, see Ap- than $5,000 must be supported by a qualified
praisal, later. appraisal and a Form 8283. See Qualified Ap- Because many kinds of collectibles may be the
praisal, later. subject of a charitable donation, it is not possi-
Household Items ble to discuss all of the possible types in this
Art valued at $20,000 or more. If you claim a publication. Most common are rare books, auto-
The FMV of used household items is usually deduction of $20,000 or more for an income tax graphs, sports memorabilia, dolls, manuscripts,
much lower than the price paid when new. charitable contribution donation of art (such as stamps, coins, guns, music and entertainment
Household items include furniture, furnishings, a painting, sculpture, antique, and a collection memorabilia, comics, toys, and natural history
electronics, appliances, linens, and similar (for example, a stamp or coin collection)), you items. Many of the elements of valuation that
items. Household items do not include paint- should attach the qualified appraisal for the art. apply to paintings and other objects of art, dis-
ings, antiques, objects of art, jewelry, gems, A photograph of a size and quality fully showing cussed earlier, also apply to collectibles.
and collections like stamp and coin collections. the object, preferably a high-resolution digital
Such used property may have little or no market image, should be provided if requested. Reference material. Publications available to
value because It may be out of style. help you determine the value of many kinds of
Art valued at $50,000 or more. If you donate collections include catalogs, dealers' price lists,
You cannot take an income tax charitable an item of art (such as a painting, sculpture, an- and specialized hobby periodicals. When using
contribution deduction for household items un- tique, and a collection (for example, a stamp or one of these price guides, you must use the
less they are in good used condition or better. coin collection)) that has been appraised at current edition at the date of contribution.
The one exception to this is a household item $50,000 or more, you can request a Statement These sources are not always reliable
that is not in good used condition or better for of Value for that item from the IRS. You must re- ! indicators of FMV and should be sup-
which you claim an income tax charitable contri- quest the statement before filing the tax return CAUTION ported by other evidence.
bution deduction of more than $500. In this that reports the donation. Your request must in-
case, you must obtain a qualified appraisal val- clude the following. For example, a dealer may sell an item for
uing the item and complete a Form 8283. See • A copy of a qualified appraisal of the item. much less than is shown on a price list, particu-
Deduction over $500 for certain clothing or See Qualified Appraisal, later. larly after the item has remained unsold for a
household items, later. • A user fee of $7,500 for one to three items long time. The price an item sold for in an auc-
If the property is valuable because it is old or and $400 for each additional item paid tion may have been the result of a rigged sale or
unique, see Paintings, Antiques, and Other through Pay.gov. A payment confirmation a mere bidding duel. The appraiser must ana-
Objects of Art, later. will be provided to you through the Pay.gov lyze the reference material, and recognize and
Page 4 Publication 561 (January 2023)

- 5 -

Page 5 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

make adjustments for misleading entries. If you obscure authors may also be of value if they are More information. Your deduction for a dona-
are claiming an income tax charitable contribu- of unusual historical or literary importance. De- ted car, boat, or airplane is generally limited to
tion deduction for the donation of a collection termining the value of such material is difficult. the gross proceeds from its sale by the qualified
valued at more than $5,000, you must obtain a For example, there may be a great difference in organization. This rule applies if the claimed
qualified appraisal and complete a Form 8283. value between two diaries that were kept by a value of the donated vehicle is more than $500.
famous person—one kept during childhood and In certain cases, you can deduct the vehicle's
Stamp collections. Most libraries have cata- the other during a later period in their life. The FMV. For details, see Pub. 526.
logs or other books that report the publisher's appraiser determines a value in these cases by
estimate of values. Generally, two price levels applying knowledge and judgment to such fac-
are shown for each stamp: the price post- tors as comparable sales and market condi- Inventory
marked and the price not postmarked. Contact tions. If you donate any inventory item to a charitable
an appraiser for assistance with properly valu-
ing stamp collections. Signatures. Signatures, or sets of signatures, organization, the amount of your deductible
that were cut from letters or other papers usu- contribution is generally the FMV of the item,
Coin collections. Many catalogs and other ally have little or no value. But complete sets of minus any gain you would have realized if you
reference materials show the writer's or publish- the signatures of U.S. presidents are in de- had sold the item at its FMV on the date of the
er's opinion of the value of coins on or near the mand. gift. For more information, see Pub. 526.
date of the publication. Like many other collec-
tors' items, the value of a coin depends on the Patents
demand for it, its age, and its rarity. Another im- Cars, Boats, and Aircraft
portant factor is the coin's condition. For exam- To determine the FMV of a patent, you must
ple, there is a great difference in the value of a If you donate a car, a boat, or an aircraft to a take into account, among other factors:
coin that is in mint condition and a similar coin charitable organization, its FMV must be deter- • Whether the patented technology has
that is only in good condition. mined. been made obsolete by other technology;
Use caution when consulting price guides • Any restrictions on the donee's use of, or
for coins as only a trained grader can distin- Certain commercial firms and trade organi- ability to transfer, the patented technology;
guish the difference between mint, uncirculated, zations publish monthly or seasonal guides for and
extremely fine, very fine, fine, very good, good, different regions of the country, containing com- • The length of time remaining before the
fair, or poor. The difference in value between plete dealer sale prices or dealer average pri- patent expires.
one grade and another could be vast. ces for recent model years. Prices are reported
for each make, model, and year. These guides However, your deduction for a donation of a
Books. The value of books is usually deter- also provide estimates for adjusting for unusual patent or other intellectual property is its FMV,
mined by selecting comparable sales and ad- equipment, unusual mileage, and physical con- minus any gain you would have realized if you
justing the prices according to the differences dition. The prices are not “official,” and these had sold the property at its FMV on the date of
between the comparable sales and the item be- publications are not considered an appraisal of the gift. Generally, this means your deduction is
ing evaluated. This can be difficult to do and, any specific donated property. But they do pro- the lesser of the property's FMV or its basis. For
except for a collection of little value, should be vide clues for making an appraisal and suggest details, see Pub. 526.
done by a specialized appraiser. Within the relative prices for comparison with current sales
general category of literary property, there are and offerings in your area.
Stocks and Bonds
appraisers who specialize in certain areas, such
as Americana, foreign imports, religious books, These publications are sometimes available
and scientific books. from public libraries or at a bank, credit union, The value of stocks and bonds is the FMV of a
or finance company. You can also find pricing share or bond on the valuation date. See Date
Modest value of collection. If the collec- information about used cars on the Internet. of contribution , earlier, under What Is Fair Mar-
tion you are donating is of modest value, not re- ket Value (FMV)?.
quiring a written appraisal, the following infor- An acceptable measure of the FMV of a do-
mation may help you in determining the FMV. nated car, boat, or airplane is an amount not in Selling prices on valuation date. If there is
A book that is very old, or very rare, is not excess of the price listed in a used vehicle pric- an active market for the contributed stocks or
necessarily valuable. There are many books ing guide for a private party sale, not the dealer bonds on a stock exchange, in an
that are very old or rare, but that have little or no retail value, of a similar vehicle. However, the over-the-counter market, or elsewhere, the
market value. FMV may be less than that amount if the vehicle FMV of each share or bond is the average price
has engine trouble, body damage, high mile- between the highest and lowest quoted selling
Condition of book. The condition of a age, or any type of excessive wear. The FMV of prices on the valuation date. For example, if the
book may have a great influence on its value. a donated vehicle is the same as the price listed highest selling price for a share was $11 and
Collectors are interested in items that are in in a used vehicle pricing guide for a private the lowest $9, the average price is $10. You get
fine, or at least good, condition. When a book party sale only if the guide lists a sales price for the average price by adding $11 and $9 and di-
has a missing page, a loose binding, tears, or a vehicle that is the same make, model, and viding the sum by 2.
stains, or is otherwise in poor condition, its year, sold in the same area, in the same condi- No sales on valuation date. If there were
value is greatly lowered. tion, with the same or similar options or acces- no sales on the valuation date, but there were
Other factors. Some other factors in the sories, and with the same or similar warranties sales within a reasonable period before and af-
valuation of a book are the kind of binding as the donated vehicle. ter the valuation date, you determine FMV by
(leather, cloth, paper), page edges, and illustra- taking the average price between the highest
tions (drawings and photographs). Collectors Example. You donate a used car in poor and lowest sales prices on the nearest date be-
usually want first editions of books. However, condition to a local high school for use by stu- fore and on the nearest date after the valuation
because of changes or additions, other editions dents studying car repair. A used car guide date. Then you weight these averages in in-
are sometimes worth as much as, or more than, shows the dealer retail value for this type of car verse order by the respective number of trading
the first edition. in poor condition is $1,600. However, the guide days between the selling dates and the valua-
shows the price for a private party sale of the tion date.
Manuscripts, autographs, diaries, and simi- car is only $750. The FMV of the car is consid-
lar items. When these items are handwritten, ered to be no more than $750. Example. On the day you gave stock to a
or at least signed by famous people, they are qualified organization, there were no sales of
often in demand and are valuable. However, Boats. Except for inexpensive small boats, the the stock. Sales of the stock nearest the valua-
the noteworthiness of an author is not the only valuation of boats should be based on an ap- tion date took place 2 trading days before the
determining factor; the writings of unknown or praisal by a marine surveyor because the physi- valuation date at an average selling price of $10
cal condition is so critical to the value. and 3 trading days after the valuation date at an
Publication 561 (January 2023) Page 5

- 6 -

Page 6 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

average selling price of $15. The FMV on the Unavailable prices. If selling prices or bid 1. Comparable Sales
valuation date was $12, figured as follows. and asked prices are not available, determine
the FMV by considering the following factors. The comparable sales method compares the
[(3 x $10) + (2 x $15)] ÷ 5 = $12 • For bonds, the soundness of the security, donated property with several similar properties
the interest yield, the date of maturity, and that have been sold. The selling prices, after
Listings on more than one stock ex other relevant factors. adjustments for differences in date of sale, size,
change. Stocks or bonds listed on more than • For shares of stock, the company's net condition, and location, would then indicate the
one stock exchange are valued based on the worth, prospective earning power and divi- estimated FMV of the donated property.
prices of the exchange on which they are princi- dend-paying capacity, and other relevant
pally dealt. This applies if these prices are pub- factors. If the comparable sales method is used to
lished in a generally available listing or publica- determine the value of unimproved real prop-
tion of general circulation. If this is not Other factors. Other relevant factors in- erty (land without significant buildings, struc-
applicable, and the stocks or bonds are repor- clude: tures, or any other improvements that add to its
ted on a composite listing of combined ex- • The nature and history of the business, es- value), the appraiser should consider the follow-
changes in a publication of general circulation, pecially its recent history; ing factors when comparing the potential com-
use the composite list. See also Unavailable pri- • The goodwill of the business; parable property and the donated property.
ces, later. • The economic outlook in the particular in- • Location, size, and zoning or use restric-
dustry; tions.
Bid and asked prices on valuation date. If • The company's position in the industry, its • Accessibility and road frontage, and avail-
there were no sales within a reasonable period competitors, and its management; and able utilities and water rights.
before and after the valuation date, the FMV is • The value of securities of corporations en- • Riparian rights (right of access to and use
the average price between the bona fide bid gaged in the same or similar business. of the water by owners of land on the bank
and asked prices on the valuation date. For preferred stock, the most important factors of a river) and existing easements,
are its yield, dividend coverage, and protection rights-of-way, leases, etc..
Example. Although there were no sales of of its liquidation preference. • Soil characteristics, vegetative cover, and
Blue Corporation stock on the valuation date, You should keep complete financial and status of mineral rights.
bona fide bid and asked prices were available other information on which the valuation is • Other factors affecting value.
on that date of $14 and $16, respectively. The based. This includes copies of reports of exami-
FMV is $15, the average price between the bid nations of the company made by accountants, For each comparable sale, the appraisal
and asked prices. engineers, or any technical experts on or close must include the names of the buyer and seller,
No prices on valuation date. If there to the valuation date. the deed book and page number, the date of
were no prices available on the valuation date, sale and selling price, a property description,
you determine FMV by taking the average pri- Restricted securities. Some classes of stock the amount and terms of mortgages, property
ces between the bona fide bid and asked prices cannot be traded publicly because of restric- surveys, the assessed value, the tax rate, and
on the closest trading date before and after the tions imposed by the Securities and Exchange the assessor's appraised FMV.
valuation date. Both dates must be within a rea- Commission, or by the corporate charter or a
sonable period. Then you weight these aver- trust agreement. These restricted securities The comparable selling prices must be ad-
ages in inverse order by the respective number usually trade at a discount in relation to freely justed to account for differences between the
of trading days between the bid and asked traded securities. sale property and the donated property. Be-
dates and the valuation date. To arrive at the FMV of restricted securities, cause differences of opinion may arise between
factors that you must consider include the re- appraisers as to the degree of comparability
Example. On the day you gave stock to a sale provisions found in the restriction agree- and the amount of the adjustment considered
qualified organization, no prices were available. ments, the relative negotiating strengths of the necessary for comparison purposes, an ap-
Bona fide bid and asked prices 3 days before buyer and seller, and the market experience of praiser should document each item of adjust-
the valuation date were $10 and 2 days after freely traded securities of the same class as the ment.
the valuation date were $15. The FMV on the restricted securities.
valuation date is $13, figured as follows. Only comparable sales having the least ad-
justments in terms of items and/or total dollar
Real Estate adjustments should be considered as compara-
[(2 x $10) + (3 x $15)] ÷ 5 = $13 ble to the donated property.
Because each piece of real estate is unique and
Prices only before or after valuation date, its valuation is complicated, a detailed appraisal 2. Capitalization of Income
but not both. If no selling prices or bona fide by a professional appraiser is necessary.
bid and asked prices are available on a date
This method capitalizes the net income from the
within a reasonable period before the valuation The appraiser must be thoroughly trained in property at a rate that represents a fair return on
date, but are available on a date within a rea- the application of appraisal principles and the particular investment at the particular time,
sonable period after the valuation date, or vice theory. In some instances, the opinions of considering the risks involved. The key ele-
versa, then the average price between the high- equally qualified appraisers may carry unequal ments are the determination of the income to be
est and lowest of such available prices may be weight, such as when one appraiser has a bet- capitalized and the rate of capitalization.
treated as the value. ter knowledge of local conditions.
Large blocks of stock. When a large block of The appraisal report must contain a com- 3. Replacement Cost New or
stock is put on the market, it may lower the sell- plete description of the property, such as street Reproduction Cost Minus
ing price of the stock if the supply is greater address, legal description, and lot and block Observed Depreciation
than the demand. On the other hand, market number, as well as physical features, condition,
forces may exist that will afford higher prices for and dimensions. The use to which the property This method, used alone, usually does not re-
large blocks of stock. Because of the many fac- is put, zoning and permitted uses, and its po- sult in a determination of FMV. Instead, it gener-
tors to be considered, determining the value of tential use for other higher and better uses are ally tends to set the upper limit of value, particu-
large blocks of stock usually requires the help of also relevant. larly in periods of rising costs, because it is
experts specializing in underwriting large quan- reasonable to assume that an informed buyer
tities of securities or in trading in the securities In general, there are three main approaches will not pay more for the real estate than it
of the industry of which the particular company to the valuation of real estate. An appraisal may would cost to reproduce a similar property. Of
is a part. require the combined use of two or three meth- course, this reasoning does not apply if a simi-
ods rather than one method only. lar property cannot be created because of loca-
tion, unusual construction, or some other
Page 6 Publication 561 (January 2023)

- 7 -

Page 7 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

reason. Generally, this method serves to sup- Interest rate. The applicable interest rate var- death benefit) and there was no insurance ele-
port the value determined from other methods. ies. It is announced monthly in a news release ment when it was transferred to the charity, the
When the replacement cost method is applied and published in the Internal Revenue Bulletin policy is treated as an annuity contract.
to improved realty, the land and improvements as a Revenue Ruling. The interest rate to use is
are valued separately. under the heading “Rate Under Section 7520”
for a given month and year. You can call the Partial Interest in Property
The replacement cost of a building is figured IRS office at 800-829-1040 to obtain this rate. Not in Trust
by considering the materials, the quality of
workmanship, and the number of square feet or Actuarial tables. You need to refer to actua- Generally, no deduction is allowed for a charita-
cubic feet in the building. This cost represents rial tables to determine a qualified interest in the ble contribution, not made in trust, of less than
the total cost of labor and material, overhead, form of an annuity, any interest for life or a term your entire interest in property. However, this
and profit. After the replacement cost has been of years, or any remainder interest to a charita- does not apply to a transfer of less than your
figured, consideration must be given to the fol- ble organization. entire interest if it is a transfer of:
lowing factors. Use the valuation tables set forth in IRS Pub • A remainder interest in your personal resi-
• Physical deterioration—the wear and tear 1457, Actuarial Valuations, Version 3A; and dence or farm,
on the building itself. Pub 1458, Actuarial Valuations, Version 3B. • An undivided part of your entire interest in
• Functional obsolescence—usually in older Both of these publications provide tables con- property, or
buildings with, for example, inadequate taining actuarial factors to be used in determin- • A qualified conservation contribution.
lighting, plumbing, or heating; small rooms; ing the present value of an annuity, an interest
or a poor floor plan. for life or a term of years, or a remainder or re- Remainder Interest in Real
• Economic obsolescence—outside forces versionary interest. For qualified charitable Property
causing the whole area to become less de- transfers, you can use the factor for the month
sirable. in which you made the contribution or for either The amount of the deduction for a donation of a
of the 2 months preceding that month. remainder interest in real property is the FMV of
Pub. 1457 also contains actuarial factors for the remainder interest at the time of the contri-
Interest in a Business computing the value of a remainder interest in a bution. To determine this value, you must know
charitable remainder annuity trust and a pooled the FMV of the property on the date of the con-
The FMV of any interest in a closely held busi- income fund. Pub. 1458 contains the factors for tribution. Multiply this value by the appropriate
ness (whether a sole proprietorship or a busi- valuing the remainder interest in a charitable re- factor. Pubs. 1457 and 1458 contain these fac-
ness taxed as a corporation or partnership) is mainder unitrust. You can download Pubs 1457 tors.
the amount that a willing buyer would pay for and 1458 from IRS.gov. Tables containing ac-
the interest to a willing seller after consideration tuarial factors for transfers to pooled income You must make an adjustment for deprecia-
of all relevant factors. Because of the many fac- funds may also be found in Regulations section tion or depletion using the factors shown in Pub.
tors to be considered in determining the FMV of 1.642(c)-6(e)(6), transfers to charitable remain- 1459, Actuarial Valuations, Version 3C. You
an interest in a closely held business, the help der unitrusts in Regulations section 1.664-4(e), can use the factors for the month in which you
of experts is usually required. Such a determi- and other transfers in Regulations section made the contribution or for either of the 2
nation requires the consideration of all available 20.2031-7(d)(6). months preceding that month. See on Annui-
financial data, as well as all relevant factors af- ties, Interests for Life or Terms of Years, Re-
fecting FMV. The following factors, although not Special factors. If you need a special factor mainders, and Reversions, earlier. You can
all-inclusive, may be helpful. for an actual transaction, you can request a let- download Pub. 1459 from IRS.gov.
• The business's net worth and prospective ter ruling. Be sure to include the date of birth of
earning power. each person the duration of whose life may af- For this purpose, the term “depreciable
• The nature and history of the business. fect the value of the interest. Also include cop- property” means any property subject to wear
• The economic outlook of the industry in ies of the relevant instruments. The IRS and tear or obsolescence, even if not used in a
which the business operates. charges a user fee for providing special factors. trade or business or for the production of in-
• The business's position in the industry, its For more information about requesting a rul- come.
competitors, and its management. ing, see Revenue Procedure 2022-1 (or annual
• The FMV of assets of the business includ- update). If the remainder interest includes both de-
ing goodwill, if applicable. preciable and nondepreciable property, for ex-
• The value of interests in businesses en- For information on the circumstances under
gaged in the same or similar industries. which a charitable deduction may be allowed ample, a house and land, the FMV must be allo-
for the donation of a partial interest in property cated between each kind of property at the time
You should keep complete financial and not in trust, see Partial Interest in Property Not of the contribution. This rule also applies to a
other information on which the valuation is in Trust, later. gift of a remainder interest that includes prop-
based. This includes copies of reports of exami- erty that is part depletable and part not depleta-
ble. Take into account depreciation or depletion
nations of the business made by accountants, Certain Life Insurance and only for the property that is subject to deprecia-
engineers, or any technical experts on or close
to the valuation date. Annuity Contracts tion or depletion.
The value of an annuity contract or a life insur- For more information, see Regulations sec-
Annuities, Interests for Life ance policy issued by a company regularly en- tion 1.170A-12.
or Terms of Years, gaged in the sale of such contracts or policies is
the amount that company would charge for a Undivided Part of Your Entire
Remainders, and Reversions comparable contract. Interest
The value of these kinds of property is their But if the donee of a life insurance policy
present value, except in the case of annuities may reasonably be expected to cash the policy A contribution of an undivided part of your entire
under contracts issued by companies regularly rather than hold it as an investment, then the interest in property must consist of a part of
engaged in their sale. The valuation of these FMV is the cash surrender value rather than the each and every substantial interest or right you
commercial annuity contracts and of insurance replacement cost. own in the property. It must extend over the en-
policies is discussed later under Certain Life In- tire term of your interest in the property. For ex-
surance and Annuity Contracts. If an annuity is payable under a combination ample, you are entitled to the income from cer-
annuity contract and life insurance policy (for tain property for your life (life estate) and you
To determine present value, you must know example, a retirement income policy with a contribute 20% of that life estate to a qualified
the applicable interest rate and use actuarial ta- organization. You can claim a deduction for the
bles. contribution if you do not have any other
Publication 561 (January 2023) Page 7

- 8 -

Page 8 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

interest in the property. To figure the value of a 2. You and the organization receiving the is that the property, without the easement,
contribution involving a partial interest, see Pub. contribution must enter into a written would be developed. In determining whether
1457. agreement certifying that the organization the property could be developed, you must also
is a qualified organization and that it has consider any zoning, conservation, or historical
If the only interest you own in real property is the resources and commitment to maintain preservation laws that would already restrict the
a remainder interest and you transfer part of the property as donated. property's potential highest and best use.
that interest to a qualified organization, see the Finally, if a potential highest and best use is
previous discussion on valuation of a remainder 3. If you make the contribution, you must in-
interest in real property. clude with your return: being considered that would require a change
in zoning or other restrictions on the property,
a. A qualified appraisal; you must address whether it is reasonably
Qualified Conservation b. Photographs of the building's entire probable that such a change would be permit-
Contribution exterior; and ted. Granting a conservation easement may in-
crease, rather than reduce, the value of prop-
A qualified conservation contribution is a contri- c. A description of all restrictions on de- erty, and in such a situation no deduction would
bution of a qualified real property interest to a velopment of the building, such as be allowed.
qualified organization to be used only for con- zoning laws and restrictive covenants.
Example. You own 10 acres of farmland.
servation purposes. If you claim a deduction of more than Similar land in the area has an FMV of $2,000
$10,000, your deduction will not be allowed un- an acre. However, land in the general area that
Qualified organization. For purposes of a less you pay a $500 filing fee. See Form is restricted solely to farm use has an FMV of
qualified conservation contribution, a qualified 8283-V, and its instructions. $1,500 an acre. Your county wants to preserve
organization is:
open space and prevent further development in
• A governmental unit; Qualified real property interest. This is any your area.
• A publicly supported charitable, religious, of the following interests in real property. You grant to the county an enforceable open
scientific, literary, educational, etc., organi-
zation; or 1. Your entire interest in real estate other space easement in perpetuity on 8 of the 10
• An organization that is controlled by, and than a mineral interest (subsurface oil, acres, restricting its use to farmland. The value
operated for the exclusive benefit of, a gas, or other minerals, and the right of ac- of this easement is $4,000, determined as fol-
governmental unit or a publicly supported cess to these minerals). lows.

charity. 2. A remainder interest. FMV of the property before
The organization must also have a commitment 3. A restriction (granted in perpetuity) on the granting easement:
to protect the conservation purposes of the use that may be made of the real property. $2,000 × 10 acres . . . . . . . . . . . . . . . . $20,000
donation and must have the resources to en- FMV of the property after
granting easement:
force the restrictions. Valuation. A qualified real property interest $1,500 × 8 acres . . . . . . . . . $12,000
described in (1) consists of the following. $2,000 × 2 acres . . . . . . . . . 4,000 16,000
Conservation purposes. Your contribution • Your entire interest in real property with
must be made only for one of the following con- you retaining a qualified mineral interest, or Value of easement . . . . . . . . . . $4,000
servation purposes. your entire interest in the real property
• Preserving land areas for outdoor recrea- when someone else owns the qualified If you later transfer in fee your remaining in-
tion by, or for the education of, the general mineral interest and the probability of sur- terest in the 8 acres to another qualified organi-
public. face mining occurring is so remote as to be zation, the FMV of your remaining interest is the
• Protecting a relatively natural habitat of negligible. A qualified mineral interest FMV of the 8 acres reduced by the FMV of the
fish, wildlife, or plants, or a similar ecosys- gives you the right to access subsurface easement granted to the first organization.
tem. oil, gas, or other minerals. You determine
• Preserving open space, including farmland the FMV of the real property absent the More information. For more information
and forest land, if it yields a significant pub- qualified mineral interest in the same man- about qualified conservation contributions, see
lic benefit. It must be either for the scenic ner that you determine the FMV of real es- Pub. 526.
enjoyment of the general public or under a tate. See Real Estate, earlier.
clearly defined federal, state, or local gov- • A remainder interest in real property. You
ernmental conservation policy. determine the FMV of a remainder interest Substantiation of
• Preserving a historically important land in real property as directed earlier under
area or a certified historic structure. There Remainder Interest in Real Property. Noncash Charitable
must be some visual public access to the • A conservation restriction (granted in per- Contributions
property. Factors used in determining the petuity) on the use which may be made of
type and amount of public access required real property. What you need to substantiate your deduction
include the historical significance of the
property, the remoteness or accessibility of The value of the charitable contribution of a depends upon the property being donated and
the site, and the extent to which intrusions perpetual conservation restriction (conservation the claimed value of this property. There are
on the privacy of individuals living on the easement) is the FMV of the easement at the three types of documents that may be required
property would be unreasonable. time of the contribution. In determining the FMV in order to substantiate your contribution.
of a conservation easement, if there is a sub- • Contemporaneous Written Acknowledg-
Building in registered historic district. A stantial record of arm's–length sales of conser- ment (CWA).
contribution of a qualified real property interest vation easements on other properties that are • Form 8283.
that is an easement or other restriction on the the same as or very similar to the donated con- • An appraisal, which in some cases must
exterior of a building in a registered historic dis- servation easement, you must take into account be a “qualified appraisal,” completed by a
trict is deductible only if it meets all of the fol- the selling price of these easements. If there are “qualified appraiser.”
lowing three conditions. no comparable sales, the FMV of the conserva-
tion easement is generally determined indirectly CWA. You must get a CWA from the charity to
1. The restriction must preserve the entire as the difference between the FMVs of the which you contributed property on or before the
exterior of the building and must prohibit property before and after the grant of the con- earlier of the date on which you file a return re-
any change to the exterior of the building servation easement. The FMV of the property porting the donation or the due date (including
that is inconsistent with its historical char- before the grant of the conservation easement extensions) for filing such return. The CWA
acter. must take into account not only the current use must include a description (but not value) of the
of the property but also an objective assess- property donated and whether the charity gave
ment of how immediate or remote the likelihood you any goods or services in exchange for the
Page 8 Publication 561 (January 2023)

- 9 -

Page 9 of 15           Fileid: … ons/p561/202301/a/xml/cycle06/source                                                     19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

property you donated. If the charity did give you     Donation less than $5,000.  If you give prop-            circulation throughout the United States, 
any goods or services, the CWA must contain a         erty worth less than $250 to charity, you should         not later than the last day of the month fol-
description and good faith estimate of goods or       obtain  a  receipt  from  the  charity.  The  receipt    lowing the end of the calendar quarter in 
services  provided.  Goods  and  services  do  not    should include the charity's name and address,           which the computation period ends,
include intangible religious benefits that are not    and the date you made the gift. If you give prop-      • The issuer or agent keeps books and re-
sold in a commercial setting.                         erty worth between $250 and $5,000, you must             cords that list for each transaction during 
                                                      obtain a CWA. You must also substantiate the             the computation period the date of settle-
Form 8283.   You must file a Form 8283 if the         FMV you claim for the property. You may need             ment of the transaction, the name and ad-
amount  of  your  deduction  for  each  noncash       to file a Form 8283.                                     dress of the broker or dealer making the 
contribution  is more than  $500,  and when you                                                                market in which the transaction occurred, 
donate  certain  publicly  traded  securities  for    Deduction over $500 for certain clothing or              and the trading price and volume, and
which  market  quotations  are  readily  available;   household items.     You must include with your        • The issuer or agent permits the IRS to re-
certain intellectual property, like a patent; a ve-   return a qualified appraisal prepared by a quali-        view the books and records described in 
hicle  for  which  you  obtained  a  CWA  meeting     fied appraiser of any single item of clothing or         the above bullet point with respect to trans-
the  requirements  of  section  170(f)(12)(B)  (in-   any  household  item  that  is  not  in  good  used      actions during the computation period 
cluding a car, boat, or airplane) for which your      condition  or  better,  and  for  which  you  deduct     upon receiving reasonable notice.
deduction is limited to the gross proceeds from       more than $500. Attach the appraisal and Form          An interdealer quotation system is any sys-
its sale; and inventory and other similar property    8283. See Household Items and Used Clothing,           tem of general circulation to brokers and deal-
described in section 1221(a)(1). You must also        earlier.  You  must  also  obtain  a  CWA  for  this   ers  that  regularly  disseminates  quotations  of 
file a Form 8283 if you have a group of similar       donation.                                              obligations by two or more identified brokers or 
items for which a total deduction of over $500 is                                                            dealers who are not related to either the issuer 
claimed. See Form 8283, below.                                                                               or  agent  who  computes  the  average  trading 
Similar  items  of  property  are  items  of  the     Deductions of More Than 
same  general  category  or  type,  such  as  coin    $5,000                                                 price  of  the  security.  A  quotation  sheet  pre-
                                                                                                             pared  and  distributed  by  a  broker  or  dealer  in 
collections,  paintings,  books,  clothing,  jewelry,                                                        the  regular  course  of  business  and  containing 
nonpublicly traded stock, land, or buildings.         Generally, if the claimed deduction for an item        only quotations of that broker or dealer is not an 
                                                      or group of similar items of donated property is 
Example.     You  claimed  a  deduction  of           more than $5,000, and was made after Decem-            interdealer quotation system.
$600  for  inventory,  $7,000  for  publicly  traded  ber 31, 1984, you must get a qualified appraisal       The  average  trading  price  is  the  average 
securities  (quotations  published  daily),  and      signed and dated by a qualified appraiser, Form        price  of  all  transactions  (weighted  by  volume), 
$6,000 for a collection of 15 books ($400 each).      8283, and attach Form 8283 to your tax return.         other than original issue or redemption transac-
                                                      There  are  exceptions,  discussed  later.  You        tions,  conducted  through  a  U.S.  office  of  a 
Appraisal.   Many, but not all, charitable contri-    should  keep  the  appraiser's  report  with  your     broker or dealer who maintains a market in the 
butions require a qualified appraisal completed       written records. Records are discussed in Pub.         issue of the security during the computation pe-
by  a  qualified  appraiser.  See  Qualified  Ap-     526. You must also obtain a CWA for this dona-         riod.  Bid  and  asked  quotations  are  not  taken 
praiser and Qualified Appraisal, later.               tion.                                                  into account.
                                                                                                             The  computation  period  is  weekly  during 
A qualified appraisal is not required for the         The  phrase  “similar  items”  means  property         October through December and monthly during 
donation of:                                          of the same generic category or type (whether          January through September. The weekly com-
• Certain publicly traded securities for which        or  not  donated  to  the  same  donee),  such  as     putation  periods  during  October  through  De-
  market quotations are readily available;            stamps,  coins,  fine  art,  books,  nonpublicly  tra- cember begin with the first Monday in October 
• Certain intellectual property, like a patent;       ded  stock,  nonpublicly  traded  securities  other    and end with the first Sunday following the last 
• A vehicle for which you obtained a CWA              than  nonpublicly  traded  stock,  land,  buildings,   Monday in December.
  meeting the requirements of section 170(f)          clothing,  jewelry,  furniture,  household  goods, 
  (12)(B) (including a car, boat, or airplane)        collectibles, or decorative arts. For example, if      Deductions of More Than 
  for which your deduction is limited to the          you give books to three schools and you deduct         $500,000
  gross proceeds from its sale;                       $2,000,  $2,500,  and  $900,  respectively,  your 
• Inventory and other similar property descri-        claimed  deduction  is  more  than  $5,000  for        If you claim a deduction of more than $500,000 
  bed in section 1221(a)(1); and                      these books. You must get a qualified appraisal        for  a  donation  of  property,  you  must  attach  a 
• Noncash property valued at less than                of the books and for each school you must at-          qualified appraisal of the property to your return. 
  $5,000 unless the property is an item of            tach a fully completed Form 8283, Section B, to        This does not apply to contributions of cash, in-
  clothing or a household item that is not in         your tax return.                                       ventory,  publicly  traded  stock,  or  intellectual 
  good used condition for which you are                                                                      property.
  claiming a value of more than $500.                 Publicly  traded  securities. Publicly  tra-
                                                      ded securities are:                                    If  you  do  not  obtain  a  qualified  appraisal 
The appraiser's opinion is never more valid           • Listed on a stock exchange in which quo-             and/or attach the appraisal to your return, if re-
than  the  facts  on  which  it  is  based;  without    tations are published on a daily basis,              quired, you cannot deduct your contribution, un-
these facts, it is simply a guess.                    • Regularly traded in a national or regional           less your failure to attach the appraisal is due to 
                                                        over-the-counter market for which pub-               reasonable cause and not to willful neglect.
Even though a qualified appraisal by a quali-           lished quotations are available, or
fied appraiser is not required, you must support      • Shares of an open-end investment com-
the value you claim for the property you contrib-       pany (mutual fund) for which quotations              Qualified Appraisal
ute to charity. For property like publicly traded       are published on a daily basis in a newspa-
securities for which market quotations are read-        per of general circulation throughout the            A qualified appraisal is an appraisal document 
ily available, you may not need an appraisal by         United States.                                       that meets the following requirements.
an  appraiser.  When  you  need  an  appraisal  by    • The issue is regularly traded during the             • Is made, signed, and dated by a qualified 
an appraiser to support the value of your deduc-        computation period (defined later) in a                appraiser (defined later) in accordance 
tion, more weight is given to an appraisal by an        market for which there is an “interdealer              with generally accepted appraisal stand-
appraiser  that  satisfies  most  of  the  require-     quotation system” (defined later),                     ards.
ments of a qualified appraisal by a qualified ap-     • The issuer or agent computes the “average            • Meets the relevant requirements of Regu-
praiser.                                                trading price” (defined later) for the same            lations section 1.170A-17(a).
                                                        issue for the computation period,                    • Is signed by the qualified appraiser and 
Cost of appraisals. You may not take a chari-         • The average trading price and total volume             dated no earlier than 60 days before the 
table contribution deduction for fees you pay for       of the issue during the computation period             date of the contribution and no later than 
appraisals of your donated property.                    are published in a newspaper of general                the due date, including extensions, of the 
Publication 561 (January 2023)                                                                                                                  Page 9

- 10 -

Page 10 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

return on which the deduction for the con- other disposition of the donated property, 4. A professional quality image of the object.
tribution is first claimed. For an appraisal including, for example, the terms of any 5. The facts on which the appraisal was
report dated before the date of the contri- agreement or understanding that: based, such as:
bution, the valuation effective date must be a. Temporarily or permanently restricts a a. Sales or analyses of similar works by
no earlier than 60 days before the date of donee's right to use or dispose of the the artist, particularly on or around the
the contribution and no later than the date donated property; valuation date;
of the contribution. For an appraisal report
dated on or after the date of the contribu- b. Earmarks donated property for a par- b. A record of any exhibitions at which
tion, the valuation effective date must be ticular use; or the specific art object had been dis-
the date of the contribution. c. Reserves to, or confers upon, anyone played;
• Does not involve a prohibited appraisal (other than a donee organization or an c. The economic state of the art market
fee. organization participating with a do- at the time of valuation, particularly
You must receive the qualified appraisal be- nee organization in cooperative fund- with respect to the specific property;
fore the due date, including extensions, of the raising) any right to the income from and
return on which a charitable contribution deduc- the donated property or to the pos-
tion is first claimed for the donated property. If session of the property, including the d. The standing of the artist in their pro-
the deduction is first claimed on an amended right to vote donated securities, to ac- fession and in the particular school or
return, the qualified appraisal must be received quire the property by purchase or oth- time period.
before the date on which the amended return is erwise, or to designate the person
filed. having the income, possession, or Number of qualified appraisals. A sepa-
right to acquire the property. rate qualified appraisal is required for each item
of property that is not included in a group of
Form 8283 must be completed and attached 5. The name, address, and taxpayer identifi- similar items of property. You need only one
to your tax return. Generally, you do not need to cation number (TIN) of the qualified ap- qualified appraisal for a group of similar items of
attach the qualified appraisal itself, but you praiser and, if the appraiser is a partner, property contributed in the same tax year, but
should keep a copy as long as it may be rele- an employee, or an independent contrac- you may get separate appraisals for each item.
vant under the tax law. There are four excep- tor engaged by a person other than the A qualified appraisal for a group of similar items
tions. donor, the name, address, and taxpayer must provide all of the required information for
• If you claim a deduction of $20,000 or identification number of the partnership or each item of similar property. The appraiser,
more for donations of art, you should at- the person who employs or engages the however, may provide a group description for
tach a complete copy of the appraisal. See appraiser. selected items the total value of which is not
Paintings, Antiques, and Other Objects of more than $100.
Art, earlier. 6. The qualifications of the qualified ap-
• If you claim a deduction of more than praiser who signs the appraisal to value Qualified appraiser. A qualified appraiser is
$500,000 for a donation of property, you the type of property being valued, includ- an individual with verifiable education and ex-
must attach the appraisal. See Deductions ing the appraiser's background, experi- perience in valuing the type of property for
of More Than $500,000, earlier. ence, education, and any membership in which the appraisal is performed.
• If you claim a deduction of more than $500 professional appraisal associations.
for an article of clothing, or a household 7. A statement that the appraisal was pre- 1. The individual:
item, that is not in good used condition or pared for income tax purposes. a. Has earned an appraisal designation
better, you must attach the appraisal. See from a generally recognized profes-
Deduction over $500 for certain clothing or 8. The declaration required by Regulations sional appraiser organization, for the
household items, earlier. section 1.170A-17(3)(iv). type of property being valued; or
• If you claim a deduction for an easement or 9. The appraised FMV on the date (or expec- b. Has met certain minimum education
other restriction on the exterior of a build- ted date) of contribution. requirements and 2 or more years of
ing in a historic district, you must attach the
appraisal. See Building in registered his- 10. The method of valuation used to deter- experience in valuing the type of prop-
toric district, earlier. mine FMV, such as the sales comparison erty being valued. To meet the mini-
approach, cost approach, or income ap- mum education requirement the indi-
Prohibited appraisal fee. Generally, no part proach. vidual must have successfully
of the fee arrangement for a qualified appraisal 11. The specific basis for the valuation, such completed professional or col-
can be based on a percentage of the appraised as any specific comparable sales transac- lege-level coursework obtained from:
value of the property. If a fee arrangement is tion. i. A professional or college-level
based on what is allowed as a deduction, after educational organization,
IRS examination or otherwise, it is treated as a Art objects. The following are examples of
fee based on a percentage of appraised value. information that should be included in a de- ii. A professional trade or appraiser
scription of donated property. These examples organization that regularly offers
Information included in qualified appraisal. are for art objects. A similar detailed breakdown educational programs in valuing
A qualified appraisal must include the following should be given for other property. Appraisals the type of property, or
information. of art objects—paintings in particular—should iii. An employer as part of an em-
1. A description of the property in sufficient include all of the following. ployee apprenticeship or educa-
detail for a person who is not generally fa- 1. A complete description of the object, indi- tion program similar to professio-
miliar with the type of property to deter- cating the: nal or college-level courses.
mine that the property appraised is the 2. The individual regularly prepares apprais-
property that was (or will be) contributed. a. Size,
als for which they are paid.
2. The physical condition of any tangible per- b. Subject matter,
3. The individual is not an excluded individ-
sonal property or real property. c. Medium, ual(defined later).
3. The date (or expected date) of contribu- d. Name of the artist (or culture), and In addition, the appraiser must make a dec-
tion (valuation effective date). laration in the appraisal that, because of their
e. Approximate date created.
4. The terms of any agreement or under- 2. The cost, date, and manner of acquisition. background, experience, education, and mem-
standing entered into (or expected to be bership in professional associations, they are
entered into) by or on behalf of the donor 3. A history of the item, including proof of au- qualified to make appraisals of the type of
and donee that relates to the use, sale, or thenticity. property being valued. The appraiser must
Page 10 Publication 561 (January 2023)

- 11 -

Page 11 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

complete the Declaration of Appraiser section 2. The appraisal resulted in: Responsibility of the IRS. The IRS is respon-
on Form 8283, Section B. More than one ap- a. A substantial valuation misstatement, sible for reviewing appraisals, but it is not re-
praiser may appraise the property, provided sponsible for making them. Supporting the FMV
that each complies with the requirements, in- b. A substantial estate or gift valuation listed on your return is your responsibility.
cluding signing the qualified appraisal and the understatement, or
The IRS does not accept appraisals without
Declaration of Appraiser section on Form 8283, c. A gross valuation misstatement. question. The IRS does not recognize any
Section B.
Excluded individuals. The following indi- The penalty imposed on the appraiser is the particular appraiser or organization of apprais-
viduals cannot be qualified appraisers for the smaller of: ers.
donated property. 1. The greater of: Timing of IRS action. The IRS generally
1. The donor of the property or the taxpayer a. 10% of the underpayment due to the does not approve valuations or appraisals be-
who claims the deduction. misstatement, or fore the actual filing of the tax return to which
the appraisal applies. In addition, the IRS gen-
2. The donee of the property. b. $1,000; or erally does not issue advance rulings approving
3. A party to the transaction in which the do- 2. 125% of the gross income received for the or disapproving such appraisals.
nor acquired the property being appraised, appraisal. Exception. For a request submitted as de-
unless the property is donated within 2 scribed earlier under Art valued at $50,000 or
months of the date of acquisition and its No penalty is imposed if the appraiser can
appraised value is not more than its ac- establish that the appraisal’s value is more more, the IRS will issue a Statement of Value
quisition price. This applies to the person likely than not correct. that can be relied on by the donor of the item of
who sold, exchanged, or gave the prop- In addition, any appraiser who falsely or art.
erty to the donor, or any person who acted fraudulently overstates the value of property de-
as an agent for the transferor or donor in scribed in a qualified appraisal of a Form 8283
the transaction. that the appraiser has signed may be subject to Penalty
a civil penalty for aiding and abetting as under-
4. Any person employed by any of the above statement of tax liability, and may have their ap- You may be liable for a penalty if you misstate
persons. For example, if the donor ac- praisal disregarded. the value or adjusted basis of donated property.
quired a painting from an art dealer, nei-
ther the dealer nor persons employed by 20% penalty. The penalty is 20% of the un-
the dealer can be qualified appraisers for Form 8283 derpayment of tax related to the misstatement
that painting. if:
Generally, if the claimed deduction for an item • The value or adjusted basis claimed on the
5. Any person related under section 267(b) of donated property is more than $5,000, you return is 150% or more of the correct
of the Internal Revenue Code to any of the must attach Form 8283 to your tax return and amount, and
above persons or married to a person rela- complete Section B. • You underpaid your tax by more than
ted under section 267(b) to any of the
above persons. If you do not attach Form 8283 to your return $5,000 because of the misstatement.
and complete Section B, the deduction will not
6. An appraiser who appraises regularly for a be allowed unless your failure was due to rea- 40% penalty. The penalty is 40%, rather than
person in (1), (2), or (3), and who does not sonable cause and not willful neglect, or was 20%, if:
perform a majority of their appraisals due to a good faith omission. • The value or adjusted basis claimed on the
made during their tax year for other per- return is 200% or more of the correct
sons. You must attach a separate Form 8283 for amount, and
7. An individual who receives a prohibited each item of contributed property that is not part • You underpaid your tax by more than
appraisal fee for the appraisal of the dona- of a group of similar items. If you contribute sim- $5,000 because of the misstatement.
ted property. See Prohibited appraisal fee, ilar items of property to the same donee organi-
earlier. zation, you need attach only one Form 8283 for
those items. If you contribute similar items of How To Get Tax Help
8. An individual who is prohibited from prac- property to more than one donee organization,
ticing before the IRS under section 330(c) you must attach a separate form for each do- If you have questions about a tax issue; need
of title 31 of the United States Code at any nee. help preparing your tax return; or want to down-
time during the 3 year period ending on ‐ load free publications, forms, or instructions, go
the date the appraisal is signed by the in- to IRS.gov to find resources that can help you
dividual. IRS Review of Appraisals right away.
In addition, an individual is not a qualified In reviewing an income tax return, the IRS may Preparing and filing your tax return. After
appraiser for a particular donation if the donor accept the claimed value of the donated prop- receiving all your wage and earnings state-
had knowledge of facts that would cause a rea- erty, based on information or appraisals sent ments (Forms W-2, W-2G, 1099-R, 1099-MISC,
sonable person to expect the appraiser to with the return, or may make its own determina- 1099-NEC, etc.); unemployment compensation
falsely overstate the value of the donated prop- tion of FMV. In either case, the IRS may: statements (by mail or in a digital format) or
erty. For example, if the donor and the ap- • Contact the taxpayer to get more informa- other government payment statements (Form
praiser make an agreement concerning the tion; 1099-G); and interest, dividend, and retirement
amount at which the property will be valued, • Refer the valuation problem to an IRS ap- statements from banks and investment firms
and the donor knows that amount is more than praiser or valuation specialist; (Forms 1099), you have several options to
the FMV of the property, the appraiser is not a • Refer the issue to Art Appraisal Services choose from to prepare and file your tax return.
qualified appraiser for the donation. (AAS), a department of professional ap- You can prepare the tax return yourself, see if
Appraiser penalties. An appraiser who praisers who consults with the Commis- you qualify for free tax preparation, or hire a tax
prepares an incorrect appraisal may have to sioner's Art Advisory Panel, a group of in- professional to prepare your return.
pay a penalty if: dependent dealers and curators. A referral
to AAS is mandatory for fine and decora- Free options for tax preparation. Go to
1. The appraiser knows or reasonably should tive art valued at $50,000 or more; or IRS.gov to see your options for preparing and
have known the appraisal would be used • Contract with an independent appraiser to
in connection with a return or claim for re- appraise the property when the objects re-
fund,; and quire appraisers of highly specialized ex-
perience and knowledge.
Publication 561 (January 2023) Page 11

- 12 -

Page 12 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

filing your return online or in your local commun- Watching IRS videos. The IRS Video portal
ity, if you qualify, which include the following. • IRS.gov/Help: A variety of tools to help you (IRSVideos.gov) contains video and audio pre-
get answers to some of the most common sentations for individuals, small businesses,
• Free File. This program lets you prepare tax questions. and tax professionals.
and file your federal individual income tax • IRS.gov/ITA: The Interactive Tax Assistant,
return for free using brand-name tax-prep- a tool that will ask you questions and, Online tax information in other languages.
aration-and-filing software or Free File filla- based on your input, provide answers on a You can find information on IRS.gov/
ble forms. However, state tax preparation number of tax law topics. MyLanguage if English isn’t your native lan-
may not be available through Free File. Go • IRS.gov/Forms: Find forms, instructions, guage.
to IRS.gov/FreeFile to see if you qualify for and publications. You will find details on
free online federal tax preparation, e-filing, the most recent tax changes and interac- Free Over-the-Phone Interpreter (OPI) Serv-
and direct deposit or payment options. tive links to help you find answers to your ice. The IRS is committed to serving our multi-
• VITA. The Volunteer Income Tax Assis- questions. lingual customers by offering OPI services. The
tance (VITA) program offers free tax help • You may also be able to access tax law in- OPI Service is a federally funded program and
to people with low-to-moderate incomes, formation in your electronic filing software. is available at Taxpayer Assistance Centers
persons with disabilities, and limited-Eng-
lish-speaking taxpayers who need help (TACs), other IRS offices, and every VITA/TCE
preparing their own tax returns. Go to Need someone to prepare your tax return? return site. The OPI Service is accessible in
IRS.gov/VITA, download the free IRS2Go There are various types of tax return preparers, more than 350 languages.
app, or call 800-906-9887 for information including enrolled agents, certified public ac-
on free tax return preparation. countants (CPAs), accountants, and many oth- Accessibility Helpline available for taxpay-
• TCE. The Tax Counseling for the Elderly ers who don’t have professional credentials. If ers with disabilities. Taxpayers who need in-
(TCE) program offers free tax help for all you choose to have someone prepare your tax formation about accessibility services can call
taxpayers, particularly those who are 60 return, choose that preparer wisely. A paid tax 833-690-0598. The Accessibility Helpline can
years of age and older. TCE volunteers preparer is: answer questions related to current and future
specialize in answering questions about • Primarily responsible for the overall sub- accessibility products and services available in
pensions and retirement-related issues stantive accuracy of your return, alternative media formats (for example, braille,
unique to seniors. Go to IRS.gov/TCE, • Required to sign the return, and large print, audio, etc.). The Accessibility Help-
download the free IRS2Go app, or call • Required to include their preparer tax iden- line does not have access to your IRS account.
888-227-7669 for information on free tax tification number (PTIN). For help with tax law, refunds, or account-rela-
return preparation. ted issues, go to IRS.gov/LetUsHelp.
• MilTax. Members of the U.S. Armed Although the tax preparer always signs the
Forces and qualified veterans may use Mil- return, you're ultimately responsible for provid- Note. Form 9000, Alternative Media Prefer-
Tax, a free tax service offered by the De- ing all the information required for the preparer ence, or Form 9000(SP) allows you to elect to
partment of Defense through Military One- to accurately prepare your return. Anyone paid receive certain types of written correspondence
Source. For more information, go to to prepare tax returns for others should have a in the following formats.
MilitaryOneSource MilitaryOneSource.mil/ ( thorough understanding of tax matters. For • Standard Print.
MilTax). more information on how to choose a tax pre- • Large Print.
Also, the IRS offers Free Fillable parer, go to Tips for Choosing a Tax Preparer
Forms, which can be completed online and on IRS.gov. • Braille.
then filed electronically regardless of in- • Audio (MP3).
come. Coronavirus. Go to IRS.gov/Coronavirus for
links to information on the impact of the corona- • Plain Text File (TXT).
Using online tools to help prepare your re- virus, as well as tax relief available for individu- • Braille Ready File (BRF).
turn. Go to IRS.gov/Tools for the following. als and families, small and large businesses,
• The Earned Income Tax Credit Assistant and tax-exempt organizations. Disasters. Go to Disaster Assistance and
(IRS.gov/EITCAssistant) determines if Emergency Relief for Individuals and
you’re eligible for the earned income credit Employers can register to use Business Businesses to review the available disaster tax
(EIC). Services Online. The Social Security Adminis- relief.
• The Online EIN Application IRS.gov/EIN ( ) tration (SSA) offers online service at SSA.gov/
helps you get an employer identification employer for fast, free, and secure online W-2 Getting tax forms and publications. Go to
number (EIN) at no cost. filing options to CPAs, accountants, enrolled IRS.gov/Forms to view, download, or print all
• The Tax Withholding Estimator IRS.gov/ ( agents, and individuals who process Form W-2, the forms, instructions, and publications you
W4app) makes it easier for you to estimate Wage and Tax Statement, and Form W-2c, may need. Or, you can go to IRS.gov/
the federal income tax you want your em- Corrected Wage and Tax Statement. OrderForms to place an order.
ployer to withhold from your paycheck.
This is tax withholding. See how your with- IRS social media. Go to IRS.gov/SocialMedia Getting tax publications and instructions in
holding affects your refund, take-home to see the various social media tools the IRS eBook format. You can also download and
pay, or tax due. uses to share the latest information on tax view popular tax publications and instructions
changes, scam alerts, initiatives, products, and (including the Instructions for Form 1040) on
• The First-Time Homebuyer Credit Account services. At the IRS, privacy and security are mobile devices as eBooks at IRS.gov/eBooks.
Look-up IRS.gov/HomeBuyer ( ) tool pro- our highest priority. We use these tools to share
vides information on your repayments and public information with you. Don’t post your so- Note. IRS eBooks have been tested using
account balance. cial security number (SSN) or other confidential Apple's iBooks for iPad. Our eBooks haven’t
• The Sales Tax Deduction Calculator information on social media sites. Always pro- been tested on other dedicated eBook readers,
(IRS.gov/SalesTax) figures the amount you tect your identity when using any social net- and eBook functionality may not operate as in-
can claim if you itemize deductions on working site. tended.
Schedule A (Form 1040). The following IRS YouTube channels pro-
Getting answers to your tax ques- vide short, informative videos on various tax-re- Access your online account (individual tax-
tions. On IRS.gov, you can get lated topics in English, Spanish, and ASL. payers only). Go to IRS.gov/Account to se-
up-to-date information on current • Youtube.com/irsvideos. curely access information about your federal tax
events and changes in tax law. • Youtube.com/irsvideosmultilingua. account.
• Youtube.com/irsvideosASL. • View the amount you owe and a break-
down by tax year.

Page 12 Publication 561 (January 2023)

- 13 -

Page 13 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• See payment plan details or apply for a Ways to check on the status of your refund. show up in our system, and processing it can
new payment plan. • Go to IRS.gov/Refunds. take up to 16 weeks.
• Make a payment or view 5 years of pay- • Download the official IRS2Go app to your
ment history and any pending or sched- mobile device to check your refund status. Understanding an IRS notice or letter
uled payments. • Call the automated refund hotline at you’ve received. Go to IRS.gov/Notices to
• Access your tax records, including key 800-829-1954. find additional information about responding to
data from your most recent tax return, and an IRS notice or letter.
transcripts. Note. The IRS can’t issue refunds before
• View digital copies of select notices from mid-February for returns that claimed the EIC or Note. You can use Schedule LEP (Form
the IRS. the additional child tax credit (ACTC). This ap- 1040), Request for Change in Language Prefer-
• Approve or reject authorization requests plies to the entire refund, not just the portion as- ence, to state a preference to receive notices,
from tax professionals. sociated with these credits. letters, or other written communications from
• View your address on file or manage your the IRS in an alternative language. You may not
communication preferences. Making a tax payment. Go to IRS.gov/ immediately receive written communications in
Payments for information on how to make a the requested language. The IRS’s commitment
Tax Pro Account. This tool lets your tax pro- payment using any of the following options. to LEP taxpayers is part of a multi-year timeline
fessional submit an authorization request to ac- • IRS Direct Pay: Pay your individual tax bill that is scheduled to begin providing translations
cess your individual taxpayer IRS online or estimated tax payment directly from in 2023. You will continue to receive communi-
account. For more information, go to IRS.gov/ your checking or savings account at no cations, including notices and letters, in English
TaxProAccount. cost to you. until they are translated to your preferred lan-
• Debit or Credit Card: Choose an approved guage.
Using direct deposit. The fastest way to re- payment processor to pay online or by
ceive a tax refund is to file electronically and phone. Contacting your local IRS office. Keep in
choose direct deposit, which securely and elec- • Electronic Funds Withdrawal: Schedule a mind, many questions can be answered on
tronically transfers your refund directly into your payment when filing your federal taxes us- IRS.gov without visiting an IRS TAC. Go to
financial account. Direct deposit also avoids the ing tax return preparation software or IRS.gov/LetUsHelp for the topics people ask
possibility that your check could be lost, stolen, through a tax professional. about most. If you still need help, IRS TACs
destroyed, or returned undeliverable to the IRS. • Electronic Federal Tax Payment System: provide tax help when a tax issue can’t be han-
Eight in 10 taxpayers use direct deposit to re- Best option for businesses. Enrollment is dled online or by phone. All TACs now provide
ceive their refunds. If you don’t have a bank ac- required. service by appointment, so you’ll know in ad-
count, go to IRS.gov/DirectDeposit for more in- • Check or Money Order: Mail your payment vance that you can get the service you need
formation on where to find a bank or credit to the address listed on the notice or in- without long wait times. Before you visit, go to
union that can open an account online. structions. IRS.gov/TACLocator to find the nearest TAC
• Cash: You may be able to pay your taxes and to check hours, available services, and ap-
Getting a transcript of your return. The with cash at a participating retail store. pointment options. Or, on the IRS2Go app, un-
quickest way to get a copy of your tax transcript • Same-Day Wire: You may be able to do der the Stay Connected tab, choose the Con-
is to go to IRS.gov/Transcripts. Click on either same-day wire from your financial institu- tact Us option and click on “Local Offices.”
“Get Transcript Online” or “Get Transcript by tion. Contact your financial institution for
Mail” to order a free copy of your transcript. If availability, cost, and time frames.
you prefer, you can order your transcript by call- The Taxpayer Advocate
ing 800-908-9946. Note. The IRS uses the latest encryption Service (TAS) Is Here To
technology to ensure that the electronic pay- Help You
Reporting and resolving your tax-related ments you make online, by phone, or from a
identity theft issues. mobile device using the IRS2Go app are safe What Is TAS?
• Tax-related identity theft happens when and secure. Paying electronically is quick, easy,
someone steals your personal information and faster than mailing in a check or money or- TAS is an independent organization within the
to commit tax fraud. Your taxes can be af- der. IRS that helps taxpayers and protects taxpayer
fected if your SSN is used to file a fraudu- rights. Their job is to ensure that every taxpayer
lent return or to claim a refund or credit. What if I can’t pay now? Go to IRS.gov/ is treated fairly and that you know and under-
• The IRS doesn’t initiate contact with tax- Payments for more information about your op- stand your rights under the Taxpayer Bill of
payers by email, text messages (including tions. Rights.
shortened links), telephone calls, or social • Apply for an online payment agreement
media channels to request or verify per- (IRS.gov/OPA) to meet your tax obligation How Can You Learn About Your
sonal or financial information. This in- in monthly installments if you can’t pay Taxpayer Rights?
cludes requests for personal identification your taxes in full today. Once you complete
numbers (PINs), passwords, or similar in- the online process, you will receive imme- The Taxpayer Bill of Rights describes 10 basic
formation for credit cards, banks, or other diate notification of whether your agree- rights that all taxpayers have when dealing with
financial accounts. ment has been approved. the IRS. Go to TaxpayerAdvocate.IRS.gov to
• Go to IRS.gov/IdentityTheft, the IRS Iden- • Use the Offer in Compromise Pre-Qualifier help you understand what these rights mean to
tity Theft Central webpage, for information to see if you can settle your tax debt for you and how they apply. These are your rights.
on identity theft and data security protec- less than the full amount you owe. For Know them. Use them.
tion for taxpayers, tax professionals, and more information on the Offer in Compro-
businesses. If your SSN has been lost or mise program, go to IRS.gov/OIC.
What Can TAS Do for You?
stolen or you suspect you’re a victim of
tax-related identity theft, you can learn Filing an amended return. Go to IRS.gov/
what steps you should take. Form1040X for information and updates. TAS can help you resolve problems that you
can’t resolve with the IRS. And their service is
• Get an Identity Protection PIN (IP PIN). IP Checking the status of your amended re- free. If you qualify for their assistance, you will
PINs are six-digit numbers assigned to tax- turn. Go to IRS.gov/WMAR to track the status be assigned to one advocate who will work with
payers to help prevent the misuse of their of Form 1040-X amended returns. you throughout the process and will do every-
SSNs on fraudulent federal income tax re-
thing possible to resolve your issue. TAS can
turns. When you have an IP PIN, it pre- Note. It can take up to 3 weeks from the help you if:
vents someone else from filing a tax return date you filed your amended return for it to • Your problem is causing financial difficulty
with your SSN. To learn more, go to
IRS.gov/IPPIN. for you, your family, or your business;

Publication 561 (January 2023) Page 13

- 14 -

Page 14 of 15 Fileid: … ons/p561/202301/a/xml/cycle06/source 19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

• You face (or your business is facing) an these broad issues, report it to them at IRS.gov/ collection disputes. In addition, LITCs can pro-
immediate threat of adverse action; or SAMS. vide information about taxpayer rights and re-
• You’ve tried repeatedly to contact the IRS sponsibilities in different languages for individu-
but no one has responded, or the IRS TAS for Tax Professionals als who speak English as a second language.
hasn’t responded by the date promised. Services are offered for free or a small fee for
eligible taxpayers. To find an LITC near you, go
TAS can provide a variety of information for tax to TaxpayerAdvocate.IRS.gov/about-us/Low-
How Can You Reach TAS? professionals, including tax law updates and Income-Taxpayer-Clinics-LITC or see IRS Pub.
guidance, TAS programs, and ways to let TAS 4134, Low Income Taxpayer Clinic List.
TAS has offices in every state, the District of know about systemic problems you’ve seen in
Columbia, and Puerto Rico. Your local advo- your practice.
cate’s number is in your local directory and at
TaxpayerAdvocate.IRS.gov/Contact-Us. You
can also call them at 877-777-4778. Low Income Taxpayer
Clinics (LITCs)
How Else Does TAS Help
Taxpayers? LITCs are independent from the IRS. LITCs
represent individuals whose income is below a
TAS works to resolve large-scale problems that certain level and need to resolve tax problems
affect many taxpayers. If you know of one of with the IRS, such as audits, appeals, and tax

Page 14 Publication 561 (January 2023)

- 15 -

Page 15 of 15            Fileid: … ons/p561/202301/a/xml/cycle06/source                           19:25 - 9-Mar-2023

The type and rule above prints on all proofs including departmental reproduction proofs. MUST be removed before printing.

                      To help us develop a more useful index, please let us know if you have ideas for index entries.
Index                 See “Comments and Suggestions” in the “Introduction” for the ways you can reach us.
 
                                   Terms of purchase or sale 2                                   Replacement cost   3
A                                                                 J                              Reversion interests 7
Aircraft 5                       D                                Jewelry and gems   4
Annuities  7                     Date of contribution 2                                          S
Annuity contracts 7              Deductions of more than          L                              Stamps 5
Antiques 4                         $5,000  9                                                     Statement of Value 11
Appraisals  9                    Deductions of more than          Life insurance   7
                                                                                                 Stocks 5
  Cost of  9                       $500,000  9
  IRS review of 11                                                M
                                                                                                 T
  Qualified appraisal 9          F                                Market conditions, effect on 
Appraiser  10                    Fair market value 2                value  3                     Tax help 11

Art objects 4                      Comparable properties, sales                                  U
  Valued at $20,000 or more 4      of   3                         O
  Valued at $50,000 or more 4      Cost 2                         Opinions of experts 3          Used clothing 4 9, 
Assistance (See Tax help)          Date of contribution 2
                                   Determining FMV   2            P                              V
B                                  Opinions of experts  3                                        Valuation of property   4
Boats 5                            Problems in determining FMV  3 Paintings  4
Bonds 5                            Replacement cost   3           Partial interest 7              Annuities 7
Books 5                          Form 8283 11                     Past events, effect on value 4  Cars, boats, and aircraft 5
Business, interest in 7          Formulas, use in valuing         Patents 5                       Collections 4
                                   property  2                    Penalties:                      Household goods    4
                                 Future events, effect on value 3   Imposed on appraiser 11       Interest in a business  7
C                                                                   Imposed on taxpayer  11       Inventory 5
Cars 5                           H                                Publications (See Tax help)     Jewelry and gems   4
                                                                  Publicly traded securities 9    Life insurance and annuity 
Clothing, used 4 9,              Historic building 8                                              contracts    7
Coins 5                          Household goods   4 9,                                           Paintings, antiques, art 
Collections 4                                                     Q                               objects   4
  Books  5                       I                                Qualified appraisal 9           Partial interest in property 7
  Coins  5                                                        Qualified appraiser 10          Patents 5
  Stamps   5                     Interest in a business 7         Qualified conservation          Real estate  6
Comparable properties, sales     Inventory 5                        contribution   8              Remainder interests    7
  of 3                           IRS review of appraisals 11                                      Reversion interests    7
Conservation contribution 8        Exception 11                   R                               Stocks and bonds   5
Cost 2                                                                                            Terms of years 7
  Rate of increase or decrease 2                                  Real estate 6
                                                                  Remainder interests 7           Used clothing 4

Publication 561 (January 2023)                                                                                            Page 15

PDF file checksum: 2873343527

(Plugin #1/9.12/13.0)