Property Donation: Appraisal Needed?

[Michael Herr]

I am planning on completing my exodus from the local war zone by donating 2 properties. County assessor has one listed as worrh 12k and the other at 18k.

Can I use those values, or do I need an appraisal? Will a BPO be enough?

[David Krulac]

@Michael Herr

If the value is over $450, then you need an appraisal. The deduction goes on Schedule A of you Federal return. You have to pay for the cost of the appraisal, and I believe that the costs of the appraisal are not deductible.

One other obstacle is that you need to find a willing donee, and they have to be an approved IRS organization.

There are also rules that your donation amount could be reduced it the donee sells the donated property for significantly less.

A BPO is not an appraisal, and the IRS requires an appraisal.

If you have owned the property for less than a year the donated value is your purchase price. If you have owned for more than 1 year the appraised value is the donated value. Obviously there could be a situation where the donated value is less than the purchase price if the value has declined during your ownership.