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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 11157
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I help run a registered nonprofit 501c3 horse rescue. Aside

Customer Question

I help run a registered nonprofit 501c3 horse rescue. Aside from the standard rescue and adoption activity the rescue also takes in donated show horses under a donation agreement. Most people donate the horses for purchase price that they can document and their accountants confirm that the horse has not been depreciated or written off for tax purposes. Most often if the purchase price is over $5000 we are asked to signed the IRS form 8283 which we have been doing and they note purchase price in the box for appraisal. Real appraisals for animals such as this are not easy to come by. Are we out of bounds in your opinion or should we be doing something different?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi - I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

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No, you're doing exactly what you're supposed to be doing ... However for a non-cash donation over $5000 the TAXPAYER is supposed to get an appraisal.

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But you don't want to be in the business of providing that value FOR them, that can be a conflict of interest... see this from IRS:

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If the value of the donated property exceeds $5,000, the donor must get a qualified appraisal for contributions of property (other than money or publicly traded securities). The donee organization is not a qualified appraiser for the purpose of valuing the donated property. For more information, get Publication 561, Determining the Value of Donated Property.

Expert:  Lane replied 1 year ago.

What you might want to do is point the donors to the guidelines and use a disclaimer on your paperwork given to them that you are not a qualified appraiser and not allowed under law to provide an appraisal.

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You want the responsibility for the value of that tax deduction (for which the taxpayer gets a benefit) squarely on the taxpayers shoulders

Expert:  Lane replied 1 year ago.

Also see this from IRS (I'll underline the pertinent part)

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For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. The signature does not represent concurrence in the appraised value of the contributed property. A signed acknowledgement represents receipt of the property described on Form 8283 on the date specified on the form. The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. A copy of Form 8283 must be given to the donee.For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. The signature does not represent concurrence in the appraised value of the contributed property. A signed acknowledgement represents receipt of the property described on Form 8283 on the date specified on the form. The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. A copy of Form 8283 must be given to the donee.

Expert:  Lane replied 1 year ago.

I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

...

That's the only way I'll be credited for the work here.

...

Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Customer: replied 1 year ago.
I was aware of your comments. Okay lets turn this around. I own horses and I want to donate one to the rescue. It has no health issues and its ready to go. I cannot find anyone that is an appraiser for show horses can I donate the horse for my purchase price?
Expert:  Lane replied 1 year ago.

If you claim more than a 5,000 deduction, and are audited, and don't have a qualified appraisal the deduction could be disallowed upon audit

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If there's no audit there's no issue

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But these do get picked from time to time

Expert:  Lane replied 1 year ago.

I hope this has helped, Mark.

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Please let me know if you have any questions at all.

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If this HAS helped, and you DON’T have other questions … I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

...

That's the only way I'll be credited for the work here.

...

Thank you!

Lane

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986.

Expert:  Lane replied 1 year ago.

Hi,

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I’m just checking back in to see how things are going.

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Did my answer help?

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Let me know…

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Thanks

Lane