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2011 1040 Tax Forms

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2011 1040 Tax Forms

2011 1040 tax forms 4. 2011 1040 tax forms   Retirement Savings Contributions Credit (Saver's Credit) Table of Contents What's New Introduction Full-time student. 2011 1040 tax forms Adjusted gross income. 2011 1040 tax forms Distributions received by spouse. 2011 1040 tax forms Testing period. 2011 1040 tax forms What's New Modified AGI limit for retirement savings contributions credit increased. 2011 1040 tax forms  For 2013, you may be able to claim the retirement savings contributions credit if your modified AGI is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). 2011 1040 tax forms Introduction You may be able to take a tax credit if you make eligible contributions (defined later) to a qualified retirement plan, an eligible deferred compensation plan, or an individual retirement arrangement (IRA). 2011 1040 tax forms You may be able to take a credit of up to $1,000 (up to $2,000 if filing jointly). 2011 1040 tax forms This credit could reduce the federal income tax you pay dollar for dollar. 2011 1040 tax forms    Can you claim the credit?   If you make eligible contributions to a qualified retirement plan, an eligible deferred compensation plan, or an IRA, you can claim the credit if all of the following apply. 2011 1040 tax forms You were born before January 2, 1996. 2011 1040 tax forms You are not a full-time student (explained next). 2011 1040 tax forms No one else, such as your parent(s), claims an exemption for you on their tax return. 2011 1040 tax forms Your adjusted gross income (defined below) is not more than: $59,000 if your filing status is married filing jointly, $44,250 if your filing status is head of household, or $29,500 if your filing status is single, married filing separately, or qualifying widow(er). 2011 1040 tax forms Full-time student. 2011 1040 tax forms   You are a full-time student if, during some part of each of 5 calendar months (not necessarily consecutive) during the calendar year, you are either: A full-time student at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or A student taking a full-time, on-farm training course given by either a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or a state, county, or local government. 2011 1040 tax forms You are a full-time student if you are enrolled for the number of hours or courses the school considers to be full time. 2011 1040 tax forms Adjusted gross income. 2011 1040 tax forms   This is generally the amount on line 38 of your 2013 Form 1040; line 22 of your 2013 Form 1040A; or line 37 of your 2013 Form 1040NR. 2011 1040 tax forms However, you must add to that amount any exclusion or deduction claimed for the year for: Foreign earned income, Foreign housing costs, Income for bona fide residents of American Samoa, and Income from Puerto Rico. 2011 1040 tax forms Eligible contributions. 2011 1040 tax forms   These include: Contributions to a traditional or Roth IRA, Salary reduction contributions (elective deferrals, including amounts designated as after-tax Roth contributions) to: A 401(k) plan (including a SIMPLE 401(k)), A section 403(b) annuity, An eligible deferred compensation plan of a state or local government (a governmental 457 plan), A SIMPLE IRA plan, or A salary reduction SEP, and Contributions to a section 501(c)(18) plan. 2011 1040 tax forms They also include voluntary after-tax employee contributions to a tax-qualified retirement plan or section 403(b) annuity. 2011 1040 tax forms For purposes of the credit, an employee contribution will be voluntary as long as it is not required as a condition of employment. 2011 1040 tax forms Reducing eligible contributions. 2011 1040 tax forms   Reduce your eligible contributions (but not below zero) by the total distributions you received during the testing period (defined later) from any IRA, plan, or annuity included above under Eligible contributions. 2011 1040 tax forms Also reduce your eligible contributions by any distribution from a Roth IRA that is not rolled over, even if the distribution is not taxable. 2011 1040 tax forms   Do not reduce your eligible contributions by any of the following. 2011 1040 tax forms The portion of any distribution which is not includible in income because it is a trustee-to-trustee transfer or a rollover distribution. 2011 1040 tax forms Distributions that are taxable as the result of an in-plan rollover to your designated Roth account. 2011 1040 tax forms Any distribution that is a return of a contribution to an IRA (including a Roth IRA) made during the year for which you claim the credit if: The distribution is made before the due date (including extensions) of your tax return for that year, You do not take a deduction for the contribution, and The distribution includes any income attributable to the contribution. 2011 1040 tax forms Loans from a qualified employer plan treated as a distribution. 2011 1040 tax forms Distributions of excess contributions or deferrals (and income attributable to excess contributions and deferrals). 2011 1040 tax forms Distributions of dividends paid on stock held by an employee stock ownership plan under section 404(k). 2011 1040 tax forms Distributions from an eligible retirement plan that are converted or rolled over to a Roth IRA. 2011 1040 tax forms Distributions from a military retirement plan. 2011 1040 tax forms Distributions from an inherited IRA by a nonspousal beneficiary. 2011 1040 tax forms Distributions received by spouse. 2011 1040 tax forms   Any distributions your spouse receives are treated as received by you if you file a joint return with your spouse both for the year of the distribution and for the year for which you claim the credit. 2011 1040 tax forms Testing period. 2011 1040 tax forms   The testing period consists of the year for which you claim the credit, the period after the end of that year and before the due date (including extensions) for filing your return for that year, and the 2 tax years before that year. 2011 1040 tax forms Example. 2011 1040 tax forms You and your spouse filed joint returns in 2011 and 2012, and plan to do so in 2013 and 2014. 2011 1040 tax forms You received a taxable distribution from a qualified plan in 2011 and a taxable distribution from an eligible deferred compensation plan in 2012. 2011 1040 tax forms Your spouse received taxable distributions from a Roth IRA in 2013 and tax-free distributions from a Roth IRA in 2014 before April 15. 2011 1040 tax forms You made eligible contributions to an IRA in 2013 and you otherwise qualify for this credit. 2011 1040 tax forms You must reduce the amount of your qualifying contributions in 2013 by the total of the distributions you received in 2011, 2012, 2013, and 2014. 2011 1040 tax forms Maximum eligible contributions. 2011 1040 tax forms   After your contributions are reduced, the maximum annual contribution on which you can base the credit is $2,000 per person. 2011 1040 tax forms Effect on other credits. 2011 1040 tax forms   The amount of this credit will not change the amount of your refundable tax credits. 2011 1040 tax forms A refundable tax credit, such as the earned income credit or the refundable amount of your child tax credit, is an amount that you would receive as a refund even if you did not otherwise owe any taxes. 2011 1040 tax forms Maximum credit. 2011 1040 tax forms   This is a nonrefundable credit. 2011 1040 tax forms The amount of the credit in any year cannot be more than the amount of tax that you would otherwise pay (not counting any refundable credits) in any year. 2011 1040 tax forms If your tax liability is reduced to zero because of other nonrefundable credits, such as the credit for child and dependent care expenses, then you will not be entitled to this credit. 2011 1040 tax forms How to figure and report the credit. 2011 1040 tax forms   The amount of the credit you can get is based on the contributions you make and your credit rate. 2011 1040 tax forms Your credit rate can be as low as 10% or as high as 50%. 2011 1040 tax forms Your credit rate depends on your income and your filing status. 2011 1040 tax forms See Form 8880 to determine your credit rate. 2011 1040 tax forms   The maximum contribution taken into account is $2,000 per person. 2011 1040 tax forms On a joint return, up to $2,000 is taken into account for each spouse. 2011 1040 tax forms   Figure the credit on Form 8880. 2011 1040 tax forms Report the credit on line 50 of your Form 1040; line 32 of your Form 1040A; or line 47 of your Form 1040NR and attach Form 8880 to your return. 2011 1040 tax forms Prev  Up  Next   Home   More Online Publications
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The 2011 1040 Tax Forms

2011 1040 tax forms Publication 561 - Main Contents Table of Contents What Is Fair Market Value (FMV)?Factors. 2011 1040 tax forms Stock. 2011 1040 tax forms Options. 2011 1040 tax forms Determining Fair Market Value Problems in Determining Fair Market Value Valuation of Various Kinds of PropertyHousehold Goods Used Clothing Jewelry and Gems Paintings, Antiques, and Other Objects of Art Collections Cars, Boats, and Aircraft Inventory Patents Stocks and Bonds Real Estate Interest in a Business Annuities, Interests for Life or Terms of Years, Remainders, and Reversions Certain Life Insurance and Annuity Contracts Partial Interest in Property Not in Trust AppraisalsDeductions of More Than $5,000 Deductions of More Than $500,000 Qualified Appraisal Form 8283 Internal Revenue Service Review of Appraisals Penalty How To Get Tax HelpLow income tax clinics (LITCs). 2011 1040 tax forms What Is Fair Market Value (FMV)? To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution. 2011 1040 tax forms Fair market value. 2011 1040 tax forms   Fair market value (FMV) is the price that property would sell for on the open market. 2011 1040 tax forms It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. 2011 1040 tax forms If you put a restriction on the use of property you donate, the FMV must reflect that restriction. 2011 1040 tax forms Example 1. 2011 1040 tax forms If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. 2011 1040 tax forms Usually, such items are worth far less than what you paid for them. 2011 1040 tax forms Example 2. 2011 1040 tax forms If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted. 2011 1040 tax forms Factors. 2011 1040 tax forms   In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. 2011 1040 tax forms These include: The cost or selling price of the item, Sales of comparable properties, Replacement cost, and Opinions of experts. 2011 1040 tax forms   These factors are discussed later. 2011 1040 tax forms Also, see Table 1 for a summary of questions to ask as you consider each factor. 2011 1040 tax forms Date of contribution. 2011 1040 tax forms   Ordinarily, the date of a contribution is the date that the transfer of the property takes place. 2011 1040 tax forms Stock. 2011 1040 tax forms   If you deliver, without any conditions, a properly endorsed stock certificate to a qualified organization or to an agent of the organization, the date of the contribution is the date of delivery. 2011 1040 tax forms If the certificate is mailed and received through the regular mail, it is the date of mailing. 2011 1040 tax forms If you deliver the certificate to a bank or broker acting as your agent or to the issuing corporation or its agent, for transfer into the name of the organization, the date of the contribution is the date the stock is transferred on the books of the corporation. 2011 1040 tax forms Options. 2011 1040 tax forms   If you grant an option to a qualified organization to buy real property, you have not made a charitable contribution until the organization exercises the option. 2011 1040 tax forms The amount of the contribution is the FMV of the property on the date the option is exercised minus the exercise price. 2011 1040 tax forms Example. 2011 1040 tax forms You grant an option to a local university, which is a qualified organization, to buy real property. 2011 1040 tax forms Under the option, the university could buy the property at any time during a 2-year period for $40,000. 2011 1040 tax forms The FMV of the property on the date the option is granted is $50,000. 2011 1040 tax forms In the following tax year, the university exercises the option. 2011 1040 tax forms The FMV of the property on the date the option is exercised is $55,000. 2011 1040 tax forms Therefore, you have made a charitable contribution of $15,000 ($55,000, the FMV, minus $40,000, the exercise price) in the tax year the option is exercised. 2011 1040 tax forms Determining Fair Market Value Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. 2011 1040 tax forms Usually it is not that simple. 2011 1040 tax forms Using such formulas, etc. 2011 1040 tax forms , seldom results in an acceptable determination of FMV. 2011 1040 tax forms There is no single formula that always applies when determining the value of property. 2011 1040 tax forms This is not to say that a valuation is only guesswork. 2011 1040 tax forms You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity. 2011 1040 tax forms For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. 2011 1040 tax forms When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. 2011 1040 tax forms On the other hand, it may be an antique, the value of which could not be determined by using any formula. 2011 1040 tax forms Cost or Selling Price of the Donated Property The cost of the property to you or the actual selling price received by the qualified organization may be the best indication of its FMV. 2011 1040 tax forms However, because conditions in the market change, the cost or selling price of property may have less weight if the property was not bought or sold reasonably close to the date of contribution. 2011 1040 tax forms The cost or selling price is a good indication of the property's value if: The purchase or sale took place close to the valuation date in an open market, The purchase or sale was at “arm's-length,” The buyer and seller knew all relevant facts, The buyer and seller did not have to act, and The market did not change between the date of purchase or sale and the valuation date. 2011 1040 tax forms Example. 2011 1040 tax forms Tom Morgan, who is not a dealer in gems, bought an assortment of gems for $5,000 from a promoter. 2011 1040 tax forms The promoter claimed that the price was “wholesale” even though he and other dealers made similar sales at similar prices to other persons who were not dealers. 2011 1040 tax forms The promoter said that if Tom kept the gems for more than 1 year and then gave them to charity, Tom could claim a charitable deduction of $15,000, which, according to the promoter, would be the value of the gems at the time of contribution. 2011 1040 tax forms Tom gave the gems to a qualified charity 13 months after buying them. 2011 1040 tax forms The selling price for these gems had not changed from the date of purchase to the date he donated them to charity. 2011 1040 tax forms The best evidence of FMV depends on actual transactions and not on some artificial estimate. 2011 1040 tax forms The $5,000 charged Tom and others is, therefore, the best evidence of the maximum FMV of the gems. 2011 1040 tax forms Terms of the purchase or sale. 2011 1040 tax forms   The terms of the purchase or sale should be considered in determining FMV if they influenced the price. 2011 1040 tax forms These terms include any restrictions, understandings, or covenants limiting the use or disposition of the property. 2011 1040 tax forms Rate of increase or decrease in value. 2011 1040 tax forms   Unless you can show that there were unusual circumstances, it is assumed that the increase or decrease in the value of your donated property from your cost has been at a reasonable rate. 2011 1040 tax forms For time adjustments, an appraiser may consider published price indexes for information on general price trends, building costs, commodity costs, securities, and works of art sold at auction in arm's-length sales. 2011 1040 tax forms Example. 2011 1040 tax forms Bill Brown bought a painting for $10,000. 2011 1040 tax forms Thirteen months later he gave it to an art museum, claiming a charitable deduction of $15,000 on his tax return. 2011 1040 tax forms The appraisal of the painting should include information showing that there were unusual circumstances that justify a 50% increase in value for the 13 months Bill held the property. 2011 1040 tax forms Arm's-length offer. 2011 1040 tax forms   An arm's-length offer to buy the property close to the valuation date may help to prove its value if the person making the offer was willing and able to complete the transaction. 2011 1040 tax forms To rely on an offer, you should be able to show proof of the offer and the specific amount to be paid. 2011 1040 tax forms Offers to buy property other than the donated item will help to determine value if the other property is reasonably similar to the donated property. 2011 1040 tax forms Sales of Comparable Properties The sales prices of properties similar to the donated property are often important in determining the FMV. 2011 1040 tax forms The weight to be given to each sale depends on the following. 2011 1040 tax forms The degree of similarity between the property sold and the donated property. 2011 1040 tax forms The time of the sale—whether it was close to the valuation date. 2011 1040 tax forms The circumstances of the sale—whether it was at arm's-length with a knowledgeable buyer and seller, with neither having to act. 2011 1040 tax forms The conditions of the market in which the sale was made—whether unusually inflated or deflated. 2011 1040 tax forms The comparable sales method of valuing real estate is explained later under Valuation of Various Kinds of Property. 2011 1040 tax forms Example 1. 2011 1040 tax forms Mary Black, who is not a book dealer, paid a promoter $10,000 for 500 copies of a single edition of a modern translation of the Bible. 2011 1040 tax forms The promoter had claimed that the price was considerably less than the “retail” price, and gave her a statement that the books had a total retail value of $30,000. 2011 1040 tax forms The promoter advised her that if she kept the Bibles for more than 1 year and then gave them to a qualified organization, she could claim a charitable deduction for the “retail” price of $30,000. 2011 1040 tax forms Thirteen months later she gave all the Bibles to a church that she selected from a list provided by the promoter. 2011 1040 tax forms At the time of her donation, wholesale dealers were selling similar quantities of Bibles to the general public for $10,000. 2011 1040 tax forms The FMV of the Bibles is $10,000, the price at which similar quantities of Bibles were being sold to others at the time of the contribution. 2011 1040 tax forms Example 2. 2011 1040 tax forms The facts are the same as in Example 1, except that the promoter gave Mary Black a second option. 2011 1040 tax forms The promoter said that if Mary wanted a charitable deduction within 1 year of the purchase, she could buy the 500 Bibles at the “retail” price of $30,000, paying only $10,000 in cash and giving a promissory note for the remaining $20,000. 2011 1040 tax forms The principal and interest on the note would not be due for 12 years. 2011 1040 tax forms According to the promoter, Mary could then, within 1 year of the purchase, give the Bibles to a qualified organization and claim the full $30,000 retail price as a charitable contribution. 2011 1040 tax forms She purchased the Bibles under the second option and, 3 months later, gave them to a church, which will use the books for church purposes. 2011 1040 tax forms At the time of the gift, the promoter was selling similar lots of Bibles for either $10,000 or $30,000. 2011 1040 tax forms The difference between the two prices was solely at the discretion of the buyer. 2011 1040 tax forms The promoter was a willing seller for $10,000. 2011 1040 tax forms Therefore, the value of Mary's contribution of the Bibles is $10,000, the amount at which similar lots of Bibles could be purchased from the promoter by members of the general public. 2011 1040 tax forms Replacement Cost The cost of buying, building, or manufacturing property similar to the donated item should be considered in determining FMV. 2011 1040 tax forms However, there must be a reasonable relationship between the replacement cost and the FMV. 2011 1040 tax forms The replacement cost is the amount it would cost to replace the donated item on the valuation date. 2011 1040 tax forms Often there is no relationship between the replacement cost and the FMV. 2011 1040 tax forms If the supply of the donated property is more or less than the demand for it, the replacement cost becomes less important. 2011 1040 tax forms To determine the replacement cost of the donated property, find the “estimated replacement cost new. 2011 1040 tax forms ” Then subtract from this figure an amount for depreciation due to the physical condition and obsolescence of the donated property. 2011 1040 tax forms You should be able to show the relationship between the depreciated replacement cost and the FMV, as well as how you arrived at the “estimated replacement cost new. 2011 1040 tax forms ” Opinions of Experts Generally, the weight given to an expert's opinion on matters such as the authenticity of a coin or a work of art, or the most profitable and best use of a piece of real estate, depends on the knowledge and competence of the expert and the thoroughness with which the opinion is supported by experience and facts. 2011 1040 tax forms For an expert's opinion to deserve much weight, the facts must support the opinion. 2011 1040 tax forms For additional information, see Appraisals, later. 2011 1040 tax forms Table 1. 2011 1040 tax forms Factors That Affect FMV IF the factor you are considering is. 2011 1040 tax forms . 2011 1040 tax forms . 2011 1040 tax forms THEN you should ask these questions. 2011 1040 tax forms . 2011 1040 tax forms . 2011 1040 tax forms     cost or selling price Was the purchase or sale of the property reasonably close to the date of contribution? Was any increase or decrease in value, as compared to your cost, at a reasonable rate? Do the terms of purchase or sale limit what can be done with the property? Was there an arm's-length offer to buy the property close to the valuation date?     sales of comparable properties How similar is the property sold to the property donated? How close is the date of sale to the valuation date? Was the sale at arm's-length? What was the condition of the market at the time of sale?     replacement cost What would it cost to replace the donated property? Is there a reasonable relationship between replacement cost and FMV? Is the supply of the donated property more or less than the demand for it?     opinions of experts Is the expert knowledgeable and competent? Is the opinion thorough and supported by facts and experience? Problems in Determining Fair Market Value There are a number of problems in determining the FMV of donated property. 2011 1040 tax forms Unusual Market Conditions The sale price of the property itself in an arm's-length transaction in an open market is often the best evidence of its value. 2011 1040 tax forms When you rely on sales of comparable property, the sales must have been made in an open market. 2011 1040 tax forms If those sales were made in a market that was artificially supported or stimulated so as not to be truly representative, the prices at which the sales were made will not indicate the FMV. 2011 1040 tax forms For example, liquidation sale prices usually do not indicate the FMV. 2011 1040 tax forms Also, sales of stock under unusual circumstances, such as sales of small lots, forced sales, and sales in a restricted market, may not represent the FMV. 2011 1040 tax forms Selection of Comparable Sales Using sales of comparable property is an important method for determining the FMV of donated property. 2011 1040 tax forms However, the amount of weight given to a sale depends on the degree of similarity between the comparable and the donated properties. 2011 1040 tax forms The degree of similarity must be close enough so that this selling price would have been given consideration by reasonably well-informed buyers or sellers of the property. 2011 1040 tax forms Example. 2011 1040 tax forms You give a rare, old book to your former college. 2011 1040 tax forms The book is a third edition and is in poor condition because of a missing back cover. 2011 1040 tax forms You discover that there was a sale for $300, near the valuation date, of a first edition of the book that was in good condition. 2011 1040 tax forms Although the contents are the same, the books are not at all similar because of the different editions and their physical condition. 2011 1040 tax forms Little consideration would be given to the selling price of the $300 property by knowledgeable buyers or sellers. 2011 1040 tax forms Future Events You may not consider unexpected events happening after your donation of property in making the valuation. 2011 1040 tax forms You may consider only the facts known at the time of the gift, and those that could be reasonably expected at the time of the gift. 2011 1040 tax forms Example. 2011 1040 tax forms You give farmland to a qualified charity. 2011 1040 tax forms The transfer provides that your mother will have the right to all income and full use of the property for her life. 2011 1040 tax forms Even though your mother dies 1 week after the transfer, the value of the property on the date it is given is its present value, subject to the life interest as estimated from actuarial tables. 2011 1040 tax forms You may not take a higher deduction because the charity received full use and possession of the land only 1 week after the transfer. 2011 1040 tax forms Using Past Events to Predict the Future A common error is to rely too much on past events that do not fairly reflect the probable future earnings and FMV. 2011 1040 tax forms Example. 2011 1040 tax forms You give all your rights in a successful patent to your favorite charity. 2011 1040 tax forms Your records show that before the valuation date there were three stages in the patent's history of earnings. 2011 1040 tax forms First, there was rapid growth in earnings when the invention was introduced. 2011 1040 tax forms Then, there was a period of high earnings when the invention was being exploited. 2011 1040 tax forms Finally, there was a decline in earnings when competing inventions were introduced. 2011 1040 tax forms The entire history of earnings may be relevant in estimating the future earnings. 2011 1040 tax forms However, the appraiser must not rely too much on the stage of rapid growth in earnings, or of high earnings. 2011 1040 tax forms The market conditions at those times do not represent the condition of the market at the valuation date. 2011 1040 tax forms What is most significant is the trend of decline in earnings up to the valuation date. 2011 1040 tax forms For more information about donations of patents, see Patents, later. 2011 1040 tax forms Valuation of Various Kinds of Property This section contains information on determining the FMV of ordinary kinds of donated property. 2011 1040 tax forms For information on appraisals, see Appraisals, later. 2011 1040 tax forms Household Goods The FMV of used household goods, such as furniture, appliances, and linens, is usually much lower than the price paid when new. 2011 1040 tax forms Such used property may have little or no market value because of its worn condition. 2011 1040 tax forms It may be out of style or no longer useful. 2011 1040 tax forms You cannot take a deduction for household goods donated after August 17, 2006, unless they are in good used condition or better. 2011 1040 tax forms A household good that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. 2011 1040 tax forms See Deduction over $500 for certain clothing or household items, later. 2011 1040 tax forms If the property is valuable because it is old or unique, see the discussion under Paintings, Antiques, and Other Objects of Art. 2011 1040 tax forms Used Clothing Used clothing and other personal items are usually worth far less than the price you paid for them. 2011 1040 tax forms Valuation of items of clothing does not lend itself to fixed formulas or methods. 2011 1040 tax forms The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value. 2011 1040 tax forms You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. 2011 1040 tax forms An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. 2011 1040 tax forms See Deduction over $500 for certain clothing or household items, later. 2011 1040 tax forms For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return. 2011 1040 tax forms Jewelry and Gems Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. 2011 1040 tax forms The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem, and whether it is now in fashion. 2011 1040 tax forms If not in fashion, the possibility of having the property redesigned, recut, or reset should be reported in the appraisal. 2011 1040 tax forms The stone's coloring, weight, cut, brilliance, and flaws should be reported and analyzed. 2011 1040 tax forms Sentimental personal value has no effect on FMV. 2011 1040 tax forms But if the jewelry was owned by a famous person, its value might increase. 2011 1040 tax forms Paintings, Antiques, and Other Objects of Art Your deduction for contributions of paintings, antiques, and other objects of art, should be supported by a written appraisal from a qualified and reputable source, unless the deduction is $5,000 or less. 2011 1040 tax forms Examples of information that should be included in appraisals of art objects—paintings in particular—are found later under Qualified Appraisal. 2011 1040 tax forms Art valued at $20,000 or more. 2011 1040 tax forms   If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the signed appraisal to your return. 2011 1040 tax forms For individual objects valued at $20,000 or more, a photograph of a size and quality fully showing the object, preferably an 8 x 10 inch color photograph or a color transparency no smaller than 4 x 5 inches, must be provided upon request. 2011 1040 tax forms Art valued at $50,000 or more. 2011 1040 tax forms   If you donate an item of art that has been appraised at $50,000 or more, you can request a Statement of Value for that item from the IRS. 2011 1040 tax forms You must request the statement before filing the tax return that reports the donation. 2011 1040 tax forms Your request must include the following. 2011 1040 tax forms A copy of a qualified appraisal of the item. 2011 1040 tax forms See Qualified Appraisal, later. 2011 1040 tax forms A $2,500 check or money order payable to the Internal Revenue Service for the user fee that applies to your request regarding one, two, or three items of art. 2011 1040 tax forms Add $250 for each item in excess of three. 2011 1040 tax forms A completed Form 8283, Section B. 2011 1040 tax forms The location of the IRS territory that has examination responsibility for your return. 2011 1040 tax forms If your request lacks essential information, you will be notified and given 30 days to provide the missing information. 2011 1040 tax forms   Send your request to: Internal Revenue Service Attention: Art Appraisal (C:AP:ART) P. 2011 1040 tax forms O. 2011 1040 tax forms Box 27720 McPherson Station Washington, DC 20038 Refunds. 2011 1040 tax forms   You can withdraw your request for a Statement of Value at any time before it is issued. 2011 1040 tax forms However, the IRS will not refund the user fee if you do. 2011 1040 tax forms   If the IRS declines to issue a Statement of Value in the interest of efficient tax administration, the IRS will refund the user fee. 2011 1040 tax forms Authenticity. 2011 1040 tax forms   The authenticity of the donated art must be determined by the appraiser. 2011 1040 tax forms Physical condition. 2011 1040 tax forms   Important items in the valuation of antiques and art are physical condition and extent of restoration. 2011 1040 tax forms These have a significant effect on the value and must be fully reported in an appraisal. 2011 1040 tax forms An antique in damaged condition, or lacking the “original brasses,” may be worth much less than a similar piece in excellent condition. 2011 1040 tax forms Art appraisers. 2011 1040 tax forms   More weight will usually be given to an appraisal prepared by an individual specializing in the kind and price range of the art being appraised. 2011 1040 tax forms Certain art dealers or appraisers specialize, for example, in old masters, modern art, bronze sculpture, etc. 2011 1040 tax forms Their opinions on the authenticity and desirability of such art would usually be given more weight than the opinions of more generalized art dealers or appraisers. 2011 1040 tax forms They can report more recent comparable sales to support their opinion. 2011 1040 tax forms   To identify and locate experts on unique, specialized items or collections, you may wish to use the current Official Museum Directory of the American Association of Museums. 2011 1040 tax forms It lists museums both by state and by category. 2011 1040 tax forms   To help you locate a qualified appraiser for your donation, you may wish to ask an art historian at a nearby college or the director or curator of a local museum. 2011 1040 tax forms The Yellow Pages often list specialized art and antique dealers, auctioneers, and art appraisers. 2011 1040 tax forms You may be able to find a qualified appraiser on the Internet. 2011 1040 tax forms You may also contact associations of dealers for guidance. 2011 1040 tax forms Collections Since many kinds of hobby collections may be the subject of a charitable donation, it is not possible to discuss all of the possible collectibles in this publication. 2011 1040 tax forms Most common are rare books, autographs, sports memorabilia, dolls, manuscripts, stamps, coins, guns, phonograph records, and natural history items. 2011 1040 tax forms Many of the elements of valuation that apply to paintings and other objects of art, discussed earlier, also apply to miscellaneous collections. 2011 1040 tax forms Reference material. 2011 1040 tax forms   Publications available to help you determine the value of many kinds of collections include catalogs, dealers' price lists, and specialized hobby periodicals. 2011 1040 tax forms When using one of these price guides, you must use the current edition at the date of contribution. 2011 1040 tax forms However, these sources are not always reliable indicators of FMV and should be supported by other evidence. 2011 1040 tax forms   For example, a dealer may sell an item for much less than is shown on a price list, particularly after the item has remained unsold for a long time. 2011 1040 tax forms The price an item sold for in an auction may have been the result of a rigged sale or a mere bidding duel. 2011 1040 tax forms The appraiser must analyze the reference material, and recognize and make adjustments for misleading entries. 2011 1040 tax forms If you are donating a valuable collection, you should get an appraisal. 2011 1040 tax forms If your donation appears to be of little value, you may be able to make a satisfactory valuation using reference materials available at a state, city, college, or museum library. 2011 1040 tax forms Stamp collections. 2011 1040 tax forms   Most libraries have catalogs or other books that report the publisher's estimate of values. 2011 1040 tax forms Generally, two price levels are shown for each stamp: the price postmarked and the price not postmarked. 2011 1040 tax forms Stamp dealers generally know the value of their merchandise and are able to prepare satisfactory appraisals of valuable collections. 2011 1040 tax forms Coin collections. 2011 1040 tax forms   Many catalogs and other reference materials show the writer's or publisher's opinion of the value of coins on or near the date of the publication. 2011 1040 tax forms Like many other collectors' items, the value of a coin depends on the demand for it, its age, and its rarity. 2011 1040 tax forms Another important factor is the coin's condition. 2011 1040 tax forms For example, there is a great difference in the value of a coin that is in mint condition and a similar coin that is only in good condition. 2011 1040 tax forms   Catalogs usually establish a category for coins, based on their physical condition—mint or uncirculated, extremely fine, very fine, fine, very good, good, fair, or poor—with a different valuation for each category. 2011 1040 tax forms Books. 2011 1040 tax forms   The value of books is usually determined by selecting comparable sales and adjusting the prices according to the differences between the comparable sales and the item being evaluated. 2011 1040 tax forms This is difficult to do and, except for a collection of little value, should be done by a specialized appraiser. 2011 1040 tax forms Within the general category of literary property, there are dealers who specialize in certain areas, such as Americana, foreign imports, Bibles, and scientific books. 2011 1040 tax forms Modest value of collection. 2011 1040 tax forms   If the collection you are donating is of modest value, not requiring a written appraisal, the following information may help you in determining the FMV. 2011 1040 tax forms   A book that is very old, or very rare, is not necessarily valuable. 2011 1040 tax forms There are many books that are very old or rare, but that have little or no market value. 2011 1040 tax forms Condition of book. 2011 1040 tax forms   The condition of a book may have a great influence on its value. 2011 1040 tax forms Collectors are interested in items that are in fine, or at least good, condition. 2011 1040 tax forms When a book has a missing page, a loose binding, tears, stains, or is otherwise in poor condition, its value is greatly lowered. 2011 1040 tax forms Other factors. 2011 1040 tax forms   Some other factors in the valuation of a book are the kind of binding (leather, cloth, paper), page edges, and illustrations (drawings and photographs). 2011 1040 tax forms Collectors usually want first editions of books. 2011 1040 tax forms However, because of changes or additions, other editions are sometimes worth as much as, or more than, the first edition. 2011 1040 tax forms Manuscripts, autographs, diaries, and similar items. 2011 1040 tax forms   When these items are handwritten, or at least signed by famous people, they are often in demand and are valuable. 2011 1040 tax forms The writings of unknowns also may be of value if they are of unusual historical or literary importance. 2011 1040 tax forms Determining the value of such material is difficult. 2011 1040 tax forms For example, there may be a great difference in value between two diaries that were kept by a famous person—one kept during childhood and the other during a later period in his or her life. 2011 1040 tax forms The appraiser determines a value in these cases by applying knowledge and judgment to such factors as comparable sales and conditions. 2011 1040 tax forms Signatures. 2011 1040 tax forms   Signatures, or sets of signatures, that were cut from letters or other papers usually have little or no value. 2011 1040 tax forms But complete sets of the signatures of U. 2011 1040 tax forms S. 2011 1040 tax forms presidents are in demand. 2011 1040 tax forms Cars, Boats, and Aircraft If you donate a car, a boat, or an aircraft to a charitable organization, its FMV must be determined. 2011 1040 tax forms Certain commercial firms and trade organizations publish monthly or seasonal guides for different regions of the country, containing complete dealer sale prices or dealer average prices for recent model years. 2011 1040 tax forms Prices are reported for each make, model, and year. 2011 1040 tax forms These guides also provide estimates for adjusting for unusual equipment, unusual mileage, and physical condition. 2011 1040 tax forms The prices are not “official,” and these publications are not considered an appraisal of any specific donated property. 2011 1040 tax forms But they do provide clues for making an appraisal and suggest relative prices for comparison with current sales and offerings in your area. 2011 1040 tax forms These publications are sometimes available from public libraries or at a bank, credit union, or finance company. 2011 1040 tax forms You can also find pricing information about used cars on the Internet. 2011 1040 tax forms An acceptable measure of the FMV of a donated car, boat, or airplane is an amount not in excess of the price listed in a used vehicle pricing guide for a private party sale, not the dealer retail value, of a similar vehicle. 2011 1040 tax forms However, the FMV may be less than that amount if the vehicle has engine trouble, body damage, high mileage, or any type of excessive wear. 2011 1040 tax forms The FMV of a donated vehicle is the same as the price listed in a used vehicle pricing guide for a private party sale only if the guide lists a sales price for a vehicle that is the same make, model, and year, sold in the same area, in the same condition, with the same or similar options or accessories, and with the same or similar warranties as the donated vehicle. 2011 1040 tax forms Example. 2011 1040 tax forms You donate a used car in poor condition to a local high school for use by students studying car repair. 2011 1040 tax forms A used car guide shows the dealer retail value for this type of car in poor condition is $1,600. 2011 1040 tax forms However, the guide shows the price for a private party sale of the car is only $750. 2011 1040 tax forms The FMV of the car is considered to be no more than $750. 2011 1040 tax forms Boats. 2011 1040 tax forms   Except for inexpensive small boats, the valuation of boats should be based on an appraisal by a marine surveyor because the physical condition is so critical to the value. 2011 1040 tax forms More information. 2011 1040 tax forms   Your deduction for a donated car, boat, or airplane generally is limited to the gross proceeds from its sale by the qualified organization. 2011 1040 tax forms This rule applies if the claimed value of the donated vehicle is more than $500. 2011 1040 tax forms In certain cases, you can deduct the vehicle's FMV. 2011 1040 tax forms For details, see Publication 526. 2011 1040 tax forms Inventory If you donate any inventory item to a charitable organization, the amount of your deductible contribution generally is the FMV of the item, minus any gain you would have realized if you had sold the item at its FMV on the date of the gift. 2011 1040 tax forms For more information, see Publication 526. 2011 1040 tax forms Patents To determine the FMV of a patent, you must take into account, among other factors: Whether the patented technology has been made obsolete by other technology; Any restrictions on the donee's use of, or ability to transfer, the patented technology; and The length of time remaining before the patent expires. 2011 1040 tax forms However, your deduction for a donation of a patent or other intellectual property is its FMV, minus any gain you would have realized if you had sold the property at its FMV on the date of the gift. 2011 1040 tax forms Generally, this means your deduction is the lesser of the property's FMV or its basis. 2011 1040 tax forms For details, see Publication 526. 2011 1040 tax forms Stocks and Bonds The value of stocks and bonds is the FMV of a share or bond on the valuation date. 2011 1040 tax forms See Date of contribution, earlier, under What Is Fair Market Value (FMV). 2011 1040 tax forms Selling prices on valuation date. 2011 1040 tax forms   If there is an active market for the contributed stocks or bonds on a stock exchange, in an over-the-counter market, or elsewhere, the FMV of each share or bond is the average price between the highest and lowest quoted selling prices on the valuation date. 2011 1040 tax forms For example, if the highest selling price for a share was $11, and the lowest $9, the average price is $10. 2011 1040 tax forms You get the average price by adding $11 and $9 and dividing the sum by 2. 2011 1040 tax forms No sales on valuation date. 2011 1040 tax forms   If there were no sales on the valuation date, but there were sales within a reasonable period before and after the valuation date, you determine FMV by taking the average price between the highest and lowest sales prices on the nearest date before and on the nearest date after the valuation date. 2011 1040 tax forms Then you weight these averages in inverse order by the respective number of trading days between the selling dates and the valuation date. 2011 1040 tax forms Example. 2011 1040 tax forms   On the day you gave stock to a qualified organization, there were no sales of the stock. 2011 1040 tax forms Sales of the stock nearest the valuation date took place two trading days before the valuation date at an average selling price of $10 and three trading days after the valuation date at an average selling price of $15. 2011 1040 tax forms The FMV on the valuation date was $12, figured as follows: [(3 x $10) + (2 x $15)] ÷ 5 = $12 Listings on more than one stock exchange. 2011 1040 tax forms   Stocks or bonds listed on more than one stock exchange are valued based on the prices of the exchange on which they are principally dealt. 2011 1040 tax forms This applies if these prices are published in a generally available listing or publication of general circulation. 2011 1040 tax forms If this is not applicable, and the stocks or bonds are reported on a composite listing of combined exchanges in a publication of general circulation, use the composite list. 2011 1040 tax forms See also Unavailable prices or closely held corporation, later. 2011 1040 tax forms Bid and asked prices on valuation date. 2011 1040 tax forms   If there were no sales within a reasonable period before and after the valuation date, the FMV is the average price between the bona fide bid and asked prices on the valuation date. 2011 1040 tax forms Example. 2011 1040 tax forms Although there were no sales of Blue Corporation stock on the valuation date, bona fide bid and asked prices were available on that date of $14 and $16, respectively. 2011 1040 tax forms The FMV is $15, the average price between the bid and asked prices. 2011 1040 tax forms No prices on valuation date. 2011 1040 tax forms   If there were no prices available on the valuation date, you determine FMV by taking the average prices between the bona fide bid and asked prices on the closest trading date before and after the valuation date. 2011 1040 tax forms Both dates must be within a reasonable period. 2011 1040 tax forms Then you weight these averages in inverse order by the respective number of trading days between the bid and asked dates and the valuation date. 2011 1040 tax forms Example. 2011 1040 tax forms On the day you gave stock to a qualified organization, no prices were available. 2011 1040 tax forms Bona fide bid and asked prices 3 days before the valuation date were $10 and 2 days after the valuation date were $15. 2011 1040 tax forms The FMV on the valuation date is $13, figured as follows: [(2 x $10) + (3 x $15)] ÷ 5 = $13 Prices only before or after valuation date, but not both. 2011 1040 tax forms   If no selling prices or bona fide bid and asked prices are available on a date within a reasonable period before the valuation date, but are available on a date within a reasonable period after the valuation date, or vice versa, then the average price between the highest and lowest of such available prices may be treated as the value. 2011 1040 tax forms Large blocks of stock. 2011 1040 tax forms   When a large block of stock is put on the market, it may lower the selling price of the stock if the supply is greater than the demand. 2011 1040 tax forms On the other hand, market forces may exist that will afford higher prices for large blocks of stock. 2011 1040 tax forms Because of the many factors to be considered, determining the value of large blocks of stock usually requires the help of experts specializing in underwriting large quantities of securities, or in trading in the securities of the industry of which the particular company is a part. 2011 1040 tax forms Unavailable prices or closely held corporation. 2011 1040 tax forms   If selling prices or bid and asked prices are not available, or if securities of a closely held corporation are involved, determine the FMV by considering the following factors. 2011 1040 tax forms For bonds, the soundness of the security, the interest yield, the date of maturity, and other relevant factors. 2011 1040 tax forms For shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors. 2011 1040 tax forms Other factors. 2011 1040 tax forms   Other relevant factors include: The nature and history of the business, especially its recent history, The goodwill of the business, The economic outlook in the particular industry, The company's position in the industry, its competitors, and its management, and The value of securities of corporations engaged in the same or similar business. 2011 1040 tax forms For preferred stock, the most important factors are its yield, dividend coverage, and protection of its liquidation preference. 2011 1040 tax forms   You should keep complete financial and other information on which the valuation is based. 2011 1040 tax forms This includes copies of reports of examinations of the company made by accountants, engineers, or any technical experts on or close to the valuation date. 2011 1040 tax forms Restricted securities. 2011 1040 tax forms   Some classes of stock cannot be traded publicly because of restrictions imposed by the Securities and Exchange Commission, or by the corporate charter or a trust agreement. 2011 1040 tax forms These restricted securities usually trade at a discount in relation to freely traded securities. 2011 1040 tax forms   To arrive at the FMV of restricted securities, factors that you must consider include the resale provisions found in the restriction agreements, the relative negotiating strengths of the buyer and seller, and the market experience of freely traded securities of the same class as the restricted securities. 2011 1040 tax forms Real Estate Because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional appraiser is necessary. 2011 1040 tax forms The appraiser must be thoroughly trained in the application of appraisal principles and theory. 2011 1040 tax forms In some instances the opinions of equally qualified appraisers may carry unequal weight, such as when one appraiser has a better knowledge of local conditions. 2011 1040 tax forms The appraisal report must contain a complete description of the property, such as street address, legal description, and lot and block number, as well as physical features, condition, and dimensions. 2011 1040 tax forms The use to which the property is put, zoning and permitted uses, and its potential use for other higher and better uses are also relevant. 2011 1040 tax forms In general, there are three main approaches to the valuation of real estate. 2011 1040 tax forms An appraisal may require the combined use of two or three methods rather than one method only. 2011 1040 tax forms 1. 2011 1040 tax forms Comparable Sales The comparable sales method compares the donated property with several similar properties that have been sold. 2011 1040 tax forms The selling prices, after adjustments for differences in date of sale, size, condition, and location, would then indicate the estimated FMV of the donated property. 2011 1040 tax forms If the comparable sales method is used to determine the value of unimproved real property (land without significant buildings, structures, or any other improvements that add to its value), the appraiser should consider the following factors when comparing the potential comparable property and the donated property: Location, size, and zoning or use restrictions, Accessibility and road frontage, and available utilities and water rights, Riparian rights (right of access to and use of the water by owners of land on the bank of a river) and existing easements, rights-of-way, leases, etc. 2011 1040 tax forms , Soil characteristics, vegetative cover, and status of mineral rights, and Other factors affecting value. 2011 1040 tax forms For each comparable sale, the appraisal must include the names of the buyer and seller, the deed book and page number, the date of sale and selling price, a property description, the amount and terms of mortgages, property surveys, the assessed value, the tax rate, and the assessor's appraised FMV. 2011 1040 tax forms The comparable selling prices must be adjusted to account for differences between the sale property and the donated property. 2011 1040 tax forms Because differences of opinion may arise between appraisers as to the degree of comparability and the amount of the adjustment considered necessary for comparison purposes, an appraiser should document each item of adjustment. 2011 1040 tax forms Only comparable sales having the least adjustments in terms of items and/or total dollar adjustments should be considered as comparable to the donated property. 2011 1040 tax forms 2. 2011 1040 tax forms Capitalization of Income This method capitalizes the net income from the property at a rate that represents a fair return on the particular investment at the particular time, considering the risks involved. 2011 1040 tax forms The key elements are the determination of the income to be capitalized and the rate of capitalization. 2011 1040 tax forms 3. 2011 1040 tax forms Replacement Cost New or Reproduction Cost Minus Observed Depreciation This method, used alone, usually does not result in a determination of FMV. 2011 1040 tax forms Instead, it generally tends to set the upper limit of value, particularly in periods of rising costs, because it is reasonable to assume that an informed buyer will not pay more for the real estate than it would cost to reproduce a similar property. 2011 1040 tax forms Of course, this reasoning does not apply if a similar property cannot be created because of location, unusual construction, or some other reason. 2011 1040 tax forms Generally, this method serves to support the value determined from other methods. 2011 1040 tax forms When the replacement cost method is applied to improved realty, the land and improvements are valued separately. 2011 1040 tax forms The replacement cost of a building is figured by considering the materials, the quality of workmanship, and the number of square feet or cubic feet in the building. 2011 1040 tax forms This cost represents the total cost of labor and material, overhead, and profit. 2011 1040 tax forms After the replacement cost has been figured, consideration must be given to the following factors: Physical deterioration—the wear and tear on the building itself, Functional obsolescence—usually in older buildings with, for example, inadequate lighting, plumbing, or heating, small rooms, or a poor floor plan, and Economic obsolescence—outside forces causing the whole area to become less desirable. 2011 1040 tax forms Interest in a Business The FMV of any interest in a business, whether a sole proprietorship or a partnership, is the amount that a willing buyer would pay for the interest to a willing seller after consideration of all relevant factors. 2011 1040 tax forms The relevant factors to be considered in valuing the business are: The FMV of the assets of the business, The demonstrated earnings capacity of the business, based on a review of past and current earnings, and The other factors used in evaluating corporate stock, if they apply. 2011 1040 tax forms The value of the goodwill of the business should also be taken into consideration. 2011 1040 tax forms You should keep complete financial and other information on which you base the valuation. 2011 1040 tax forms This includes copies of reports of examinations of the business made by accountants, engineers, or any technical experts on or close to the valuation date. 2011 1040 tax forms Annuities, Interests for Life or Terms of Years, Remainders, and Reversions The value of these kinds of property is their present value, except in the case of annuities under contracts issued by companies regularly engaged in their sale. 2011 1040 tax forms The valuation of these commercial annuity contracts and of insurance policies is discussed later under Certain Life Insurance and Annuity Contracts. 2011 1040 tax forms To determine present value, you must know the applicable interest rate and use actuarial tables. 2011 1040 tax forms Interest rate. 2011 1040 tax forms   The applicable interest rate varies. 2011 1040 tax forms It is announced monthly in a news release and published in the Internal Revenue Bulletin as a Revenue Ruling. 2011 1040 tax forms The interest rate to use is under the heading “Rate Under Section 7520” for a given month and year. 2011 1040 tax forms You can call the IRS office at 1-800-829-1040 to obtain this rate. 2011 1040 tax forms Actuarial tables. 2011 1040 tax forms   You need to refer to actuarial tables to determine a qualified interest in the form of an annuity, any interest for life or a term of years, or any remainder interest to a charitable organization. 2011 1040 tax forms   Use the valuation tables set forth in IRS Publications 1457, Actuarial Values (Book Aleph), and 1458, Actuarial Values (Book Beth). 2011 1040 tax forms Both of these publications provide tables containing actuarial factors to be used in determining the present value of an annuity, an interest for life or for a term of years, or a remainder or reversionary interest. 2011 1040 tax forms For qualified charitable transfers, you can use the factor for the month in which you made the contribution or for either of the 2 months preceding that month. 2011 1040 tax forms   Publication 1457 also contains actuarial factors for computing the value of a remainder interest in a charitable remainder annuity trust and a pooled income fund. 2011 1040 tax forms Publication 1458 contains the factors for valuing the remainder interest in a charitable remainder unitrust. 2011 1040 tax forms You can download Publications 1457 and 1458 from www. 2011 1040 tax forms irs. 2011 1040 tax forms gov. 2011 1040 tax forms In addition, they are available for purchase via the website of the U. 2011 1040 tax forms S. 2011 1040 tax forms Government Printing Office, by phone at (202) 512-1800, or by mail from the: Superintendent of Documents P. 2011 1040 tax forms O. 2011 1040 tax forms Box 371954 Pittsburgh, PA 15250-7954 Tables containing actuarial factors for transfers to pooled income funds may also be found in Income Tax Regulation 1. 2011 1040 tax forms 642(c)-6(e)(6), transfers to charitable remainder unitrusts in Regulation 1. 2011 1040 tax forms 664-4(e), and other transfers in Regulation 20. 2011 1040 tax forms 2031-7(d)(6). 2011 1040 tax forms Special factors. 2011 1040 tax forms   If you need a special factor for an actual transaction, you can request a letter ruling. 2011 1040 tax forms Be sure to include the date of birth of each person the duration of whose life may affect the value of the interest. 2011 1040 tax forms Also include copies of the relevant instruments. 2011 1040 tax forms IRS charges a user fee for providing special factors. 2011 1040 tax forms   For more information about requesting a ruling, see Revenue Procedure 2006-1 (or annual update), 2006-1 I. 2011 1040 tax forms R. 2011 1040 tax forms B. 2011 1040 tax forms 1. 2011 1040 tax forms Revenue Procedure 2006-1 is available at www. 2011 1040 tax forms irs. 2011 1040 tax forms gov/irb/2006-01_IRB/ar06. 2011 1040 tax forms html. 2011 1040 tax forms   For information on the circumstances under which a charitable deduction may be allowed for the donation of a partial interest in property not in trust, see Partial Interest in Property Not in Trust, later. 2011 1040 tax forms Certain Life Insurance and Annuity Contracts The value of an annuity contract or a life insurance policy issued by a company regularly engaged in the sale of such contracts or policies is the amount that company would charge for a comparable contract. 2011 1040 tax forms But if the donee of a life insurance policy may reasonably be expected to cash the policy rather than hold it as an investment, then the FMV is the cash surrender value rather than the replacement cost. 2011 1040 tax forms If an annuity is payable under a combination annuity contract and life insurance policy (for example, a retirement income policy with a death benefit) and there was no insurance element when it was transferred to the charity, the policy is treated as an annuity contract. 2011 1040 tax forms Partial Interest in Property Not in Trust Generally, no deduction is allowed for a charitable contribution, not made in trust, of less than your entire interest in property. 2011 1040 tax forms However, this does not apply to a transfer of less than your entire interest if it is a transfer of: A remainder interest in your personal residence or farm, An undivided part of your entire interest in property, or A qualified conservation contribution. 2011 1040 tax forms Remainder Interest in Real Property The amount of the deduction for a donation of a remainder interest in real property is the FMV of the remainder interest at the time of the contribution. 2011 1040 tax forms To determine this value, you must know the FMV of the property on the date of the contribution. 2011 1040 tax forms Multiply this value by the appropriate factor. 2011 1040 tax forms Publications 1457 and 1458 contain these factors. 2011 1040 tax forms You must make an adjustment for depreciation or depletion using the factors shown in Publication 1459, Actuarial Values (Book Gimel). 2011 1040 tax forms You can use the factors for the month in which you made the contribution or for either of the two months preceding that month. 2011 1040 tax forms See the earlier discussion on Annuities, Interests for Life or Terms of Years, Remainders, and Reversions. 2011 1040 tax forms You can download Publication 1459 from www. 2011 1040 tax forms irs. 2011 1040 tax forms gov. 2011 1040 tax forms For this purpose, the term “depreciable property” means any property subject to wear and tear or obsolescence, even if not used in a trade or business or for the production of income. 2011 1040 tax forms If the remainder interest includes both depreciable and nondepreciable property, for example a house and land, the FMV must be allocated between each kind of property at the time of the contribution. 2011 1040 tax forms This rule also applies to a gift of a remainder interest that includes property that is part depletable and part not depletable. 2011 1040 tax forms Take into account depreciation or depletion only for the property that is subject to depreciation or depletion. 2011 1040 tax forms For more information, see section 1. 2011 1040 tax forms 170A-12 of the Income Tax Regulations. 2011 1040 tax forms Undivided Part of Your Entire Interest A contribution of an undivided part of your entire interest in property must consist of a part of each and every substantial interest or right you own in the property. 2011 1040 tax forms It must extend over the entire term of your interest in the property. 2011 1040 tax forms For example, you are entitled to the income from certain property for your life (life estate) and you contribute 20% of that life estate to a qualified organization. 2011 1040 tax forms You can claim a deduction for the contribution if you do not have any other interest in the property. 2011 1040 tax forms To figure the value of a contribution involving a partial interest, see Publication 1457. 2011 1040 tax forms If the only interest you own in real property is a remainder interest and you transfer part of that interest to a qualified organization, see the previous discussion on valuation of a remainder interest in real property. 2011 1040 tax forms Qualified Conservation Contribution A qualified conservation contribution is a contribution of a qualified real property interest to a qualified organization to be used only for conservation purposes. 2011 1040 tax forms Qualified organization. 2011 1040 tax forms   For purposes of a qualified conservation contribution, a qualified organization is: A governmental unit, A publicly supported charitable, religious, scientific, literary, educational, etc. 2011 1040 tax forms , organization, or An organization that is controlled by, and operated for the exclusive benefit of, a governmental unit or a publicly supported charity. 2011 1040 tax forms The organization also must have a commitment to protect the conservation purposes of the donation and must have the resources to enforce the restrictions. 2011 1040 tax forms Conservation purposes. 2011 1040 tax forms   Your contribution must be made only for one of the following conservation purposes. 2011 1040 tax forms Preserving land areas for outdoor recreation by, or for the education of, the general public. 2011 1040 tax forms Protecting a relatively natural habitat of fish, wildlife, or plants, or a similar ecosystem. 2011 1040 tax forms Preserving open space, including farmland and forest land, if it yields a significant public benefit. 2011 1040 tax forms It must be either for the scenic enjoyment of the general public or under a clearly defined federal, state, or local governmental conservation policy. 2011 1040 tax forms Preserving a historically important land area or a certified historic structure. 2011 1040 tax forms There must be some visual public access to the property. 2011 1040 tax forms Factors used in determining the type and amount of public access required include the historical significance of the property, the remoteness or accessibility of the site, and the extent to which intrusions on the privacy of individuals living on the property would be unreasonable. 2011 1040 tax forms Building in registered historic district. 2011 1040 tax forms   A contribution after July 25, 2006, of a qualified real property interest that is an easement or other restriction on the exterior of a building in a registered historic district is deductible only if it meets all of the following three conditions. 2011 1040 tax forms The restriction must preserve the entire exterior of the building and must prohibit any change to the exterior of the building that is inconsistent with its historical character. 2011 1040 tax forms You and the organization receiving the contribution must enter into a written agreement certifying, that the organization is a qualified organization and that it has the resources and commitment to maintain the property as donated. 2011 1040 tax forms If you make the contribution in a tax year beginning after August 17, 2006, you must include with your return: A qualified appraisal, Photographs of the building's entire exterior, and A description of all restrictions on development of the building, such as zoning laws and restrictive covenants. 2011 1040 tax forms   If you make this type of contribution after February 12, 2007, and claim a deduction of more than $10,000, your deduction will not be allowed unless you pay a $500 filing fee. 2011 1040 tax forms See Form 8283-V, Payment Voucher for Filing Fee Under Section 170(f)(13), and its instructions. 2011 1040 tax forms Qualified real property interest. 2011 1040 tax forms   This is any of the following interests in real property. 2011 1040 tax forms Your entire interest in real estate other than a mineral interest (subsurface oil, gas, or other minerals, and the right of access to these minerals). 2011 1040 tax forms A remainder interest. 2011 1040 tax forms A restriction (granted in perpetuity) on the use that may be made of the real property. 2011 1040 tax forms Valuation. 2011 1040 tax forms   A qualified real property interest described in (1) should be valued in a manner that is consistent with the type of interest transferred. 2011 1040 tax forms If you transferred all the interest in the property, the FMV of the property is the amount of the contribution. 2011 1040 tax forms If you do not transfer the mineral interest, the FMV of the surface rights in the property is the amount of the contribution. 2011 1040 tax forms   If you owned only a remainder interest or an income interest (life estate), see Undivided Part of Your Entire Interest, earlier. 2011 1040 tax forms If you owned the entire property but transferred only a remainder interest (item (2)), see Remainder Interest in Real Property, earlier. 2011 1040 tax forms   In determining the value of restrictions, you should take into account the selling price in arm's-length transactions of other properties that have comparable restrictions. 2011 1040 tax forms If there are no comparable sales, the restrictions are valued indirectly as the difference between the FMVs of the property involved before and after the grant of the restriction. 2011 1040 tax forms   The FMV of the property before contribution of the restriction should take into account not only current use but the likelihood that the property, without the restriction, would be developed. 2011 1040 tax forms You should also consider any zoning, conservation, or historical preservation laws that would restrict development. 2011 1040 tax forms Granting an easement may increase, rather than reduce, the value of property, and in such a situation no deduction would be allowed. 2011 1040 tax forms Example. 2011 1040 tax forms   You own 10 acres of farmland. 2011 1040 tax forms Similar land in the area has an FMV of $2,000 an acre. 2011 1040 tax forms However, land in the general area that is restricted solely to farm use has an FMV of $1,500 an acre. 2011 1040 tax forms Your county wants to preserve open space and prevent further development in your area. 2011 1040 tax forms   You grant to the county an enforceable open space easement in perpetuity on 8 of the 10 acres, restricting its use to farmland. 2011 1040 tax forms The value of this easement is $4,000, determined as follows: FMV of the property before granting easement:   $2,000 × 10 acres $20,000 FMV of the property after granting easement:   $1,500 × 8 acres $12,000   $2,000 × 2 acres 4,000 16,000 Value of easement   $4,000   If you later transfer in fee your remaining interest in the 8 acres to another qualified organization, the FMV of your remaining interest is the FMV of the 8 acres reduced by the FMV of the easement granted to the first organization. 2011 1040 tax forms More information. 2011 1040 tax forms   For more information about qualified conservation contributions, see Publication 526. 2011 1040 tax forms Appraisals Appraisals are not necessary for items of property for which you claim a deduction of $5,000 or less. 2011 1040 tax forms (There is one exception, described next, for certain clothing and household items. 2011 1040 tax forms ) However, you generally will need an appraisal for donated property for which you claim a deduction of more than $5,000. 2011 1040 tax forms There are exceptions. 2011 1040 tax forms See Deductions of More Than $5,000, later. 2011 1040 tax forms The weight given an appraisal depends on the completeness of the report, the qualifications of the appraiser, and the appraiser's demonstrated knowledge of the donated property. 2011 1040 tax forms An appraisal must give all the facts on which to base an intelligent judgment of the value of the property. 2011 1040 tax forms The appraisal will not be given much weight if: All the factors that apply are not considered, The opinion is not supported with facts, such as purchase price and comparable sales, or The opinion is not consistent with known facts. 2011 1040 tax forms The appraiser's opinion is never more valid than the facts on which it is based; without these facts it is simply a guess. 2011 1040 tax forms The opinion of a person claiming to be an expert is not binding on the Internal Revenue Service. 2011 1040 tax forms All facts associated with the donation must be considered. 2011 1040 tax forms Deduction over $500 for certain clothing or household items. 2011 1040 tax forms   You must include with your return a qualified appraisal of any single item of clothing or any household item that is not in good used condition or better, that you donated after August 17, 2006, and for which you deduct more than $500. 2011 1040 tax forms See Household Goods and Used Clothing, earlier. 2011 1040 tax forms Cost of appraisals. 2011 1040 tax forms   You may not take a charitable contribution deduction for fees you pay for appraisals of your donated property. 2011 1040 tax forms However, these fees may qualify as a miscellaneous deduction, subject to the 2% limit, on Schedule A (Form 1040) if paid to determine the amount allowable as a charitable contribution. 2011 1040 tax forms Deductions of More Than $5,000 Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser, and you must attach Section B of Form 8283 to your tax return. 2011 1040 tax forms There are exceptions, discussed later. 2011 1040 tax forms You should keep the appraiser's report with your written records. 2011 1040 tax forms Records are discussed in Publication 526. 2011 1040 tax forms The phrase “similar items” means property of the same generic category or type (whether or not donated to the same donee), such as stamp collections, coin collections, lithographs, paintings, photographs, books, nonpublicly traded stock, nonpublicly traded securities other than nonpublicly traded stock, land, buildings, clothing, jewelry, furniture, electronic equipment, household appliances, toys, everyday kitchenware, china, crystal, or silver. 2011 1040 tax forms For example, if you give books to three schools and you deduct $2,000, $2,500, and $900, respectively, your claimed deduction is more than $5,000 for these books. 2011 1040 tax forms You must get a qualified appraisal of the books and for each school you must attach a fully completed Form 8283, Section B, to your tax return. 2011 1040 tax forms Exceptions. 2011 1040 tax forms   You do not need an appraisal if the property is: Nonpublicly traded stock of $10,000 or less, A vehicle (including a car, boat, or airplane) for which your deduction is limited to the gross proceeds from its sale, Qualified intellectual property, such as a patent, Certain publicly traded securities described next, Inventory and other property donated by a corporation that are “qualified contributions” for the care of the ill, the needy, or infants, within the meaning of section 170(e)(3)(A) of the Internal Revenue Code, or Stock in trade, inventory, or property held primarily for sale to customers in the ordinary course of your trade or business. 2011 1040 tax forms   Although an appraisal is not required for the types of property just listed, you must provide certain information about a donation of any of these types of property on Form 8283. 2011 1040 tax forms Publicly traded securities. 2011 1040 tax forms   Even if your claimed deduction is more than $5,000, neither a qualified appraisal nor Section B of Form 8283 is required for publicly traded securities that are: Listed on a stock exchange in which quotations are published on a daily basis, Regularly traded in a national or regional over-the-counter market for which published quotations are available, or Shares of an open-end investment company (mutual fund) for which quotations are published on a daily basis in a newspaper of general circulation throughout the United States. 2011 1040 tax forms Publicly traded securities that meet these requirements must be reported on Form 8283, Section A. 2011 1040 tax forms   A qualified appraisal is not required, but Form 8283, Section B, Parts I and IV, must be completed, for an issue of a security that does not meet the requirements just listed but does meet these requirements: The issue is regularly traded during the computation period (defined later) in a market for which there is an “interdealer quotation system” (defined later), The issuer or agent computes the “average trading price” (defined later) for the same issue for the computation period, The average trading price and total volume of the issue during the computation period are published in a newspaper of general circulation throughout the United States, not later than the last day of the month following the end of the calendar quarter in which the computation period ends, The issuer or agent keeps books and records that list for each transaction during the computation period the date of settlement of the transaction, the name and address of the broker or dealer making the market in which the transaction occurred, and the trading price and volume, and The issuer or agent permits the Internal Revenue Service to review the books and records described in item (4) with respect to transactions during the computation period upon receiving reasonable notice. 2011 1040 tax forms   An interdealer quotation system is any system of general circulation to brokers and dealers that regularly disseminates quotations of obligations by two or more identified brokers or dealers who are not related to either the issuer or agent who computes the average trading price of the security. 2011 1040 tax forms A quotation sheet prepared and distributed by a broker or dealer in the regular course of business and containing only quotations of that broker or dealer is not an interdealer quotation system. 2011 1040 tax forms   The average trading price is the average price of all transactions (weighted by volume), other than original issue or redemption transactions, conducted through a United States office of a broker or dealer who maintains a market in the issue of the security during the computation period. 2011 1040 tax forms Bid and asked quotations are not taken into account. 2011 1040 tax forms   The computation period is weekly during October through December and monthly during January through September. 2011 1040 tax forms The weekly computation periods during October through December begin with the first Monday in October and end with the first Sunday following the last Monday in December. 2011 1040 tax forms Nonpublicly traded stock. 2011 1040 tax forms   If you contribute nonpublicly traded stock, for which you claim a deduction of $10,000 or less, a qualified appraisal is not required. 2011 1040 tax forms However, you must attach Form 8283 to your tax return, with Section B, Parts I and IV, completed. 2011 1040 tax forms Deductions of More Than $500,000 If you claim a deduction of more than $500,000 for a donation of property, you must attach a qualified appraisal of the property to your return. 2011 1040 tax forms This does not apply to contributions of cash, inventory, publicly traded stock, or intellectual property. 2011 1040 tax forms If you do not attach the appraisal, you cannot deduct your contribution, unless your failure to attach the appraisal is due to reasonable cause and not to willful neglect. 2011 1040 tax forms Qualified Appraisal Generally, if the claimed deduction for an item or group of similar items of donated property is more than $5,000, you must get a qualified appraisal made by a qualified appraiser. 2011 1040 tax forms You must also complete Form 8283, Section B, and attach it to your tax return. 2011 1040 tax forms See Deductions of More Than $5,000, earlier. 2011 1040 tax forms A qualified appraisal is an appraisal document that: Is made, signed, and dated by a qualified appraiser (defined later) in accordance with generally accepted appraisal standards, Meets the relevant requirements of Regulations section 1. 2011 1040 tax forms 170A-13(c)(3) and Notice 2006-96, 2006-46 I. 2011 1040 tax forms R. 2011 1040 tax forms B. 2011 1040 tax forms 902 (available at www. 2011 1040 tax forms irs. 2011 1040 tax forms gov/irb/2006-46_IRB/ar13. 2011 1040 tax forms html), Relates to an appraisal made not earlier than 60 days before the date of contribution of the appraised property, Does not involve a prohibited appraisal fee, and Includes certain information (covered later). 2011 1040 tax forms You must receive the qualified appraisal before the due date, including extensions, of the return on which a charitable contribution deduction is first claimed for the donated property. 2011 1040 tax forms If the deduction is first claimed on an amended return, the qualified appraisal must be received before the date on which the amended return is filed. 2011 1040 tax forms Form 8283, Section B, must be attached to your tax return. 2011 1040 tax forms Generally, you do not need to attach the qualified appraisal itself, but you should keep a copy as long as it may be relevant under the tax law. 2011 1040 tax forms There are four exceptions. 2011 1040 tax forms If you claim a deduction of $20,000 or more for donations of art, you must attach a complete copy of the appraisal. 2011 1040 tax forms See Paintings, Antiques, and Other Objects of Art, earlier. 2011 1040 tax forms If you claim a deduction of more than $500,000 for a donation of property, you must attach the appraisal. 2011 1040 tax forms See Deductions of More Than $500,000, earlier. 2011 1040 tax forms If you claim a deduction of more than $500 for an article of clothing, or a household item, that is not in good used condition or better, that you donated after August 17, 2006, you must attach the appraisal. 2011 1040 tax forms See Deduction over $500 for certain clothing or household items, earlier. 2011 1040 tax forms If you claim a deduction in a tax year beginning after August 17, 2006, for an easement or other restriction on the exterior of a building in a historic district, you must attach the appraisal. 2011 1040 tax forms See Building in registered historic district, earlier. 2011 1040 tax forms Prohibited appraisal fee. 2011 1040 tax forms   Generally, no part of the fee arrangement for a qualified appraisal can be based on a percentage of the appraised value of the property. 2011 1040 tax forms If a fee arrangement is based on what is allowed as a deduction, after Internal Revenue Service examination or otherwise, it is treated as a fee based on a percentage of appraised value. 2011 1040 tax forms However, appraisals are not disqualified when an otherwise prohi