Philanthropically-minded individuals and entities support qualifying not-for-profits with tax-deductible donations of a wide range of assets. Donations are often made with cash; however, charitable donations can be made with a wide variety of other assets such as publicly traded stocks and other marketable securities, interests in companies that are privately held, real estate, and machinery and equipment. Just like cash, the donor is generally able to deduct the fair market value (that is, the equivalent amount of cash that the donated property is worth), from the donor’s taxable income, thereby supporting the charitable organization and also reducing taxes.
Appraisal Economics has been providing charitable donation valuation services to donors and recipients, as well as a wide range of other valuation services, for over 25 years. Additionally, we have been retained by the Internal Revenue Service to serve as its expert in the review of appraisals submitted to the IRS. Examples of our valuations for charitable donation purposes include:
- Privately held equity units issued by a leading global private equity firm with $200 billion under management.
- Equity units issued by a privately held international medical device manufacturing company worth approximately $1 billion.
- Technology assets of a Fortune 500 telecommunications firm.
- Non-voting membership interests in a small New Jersey-based company that owns real estate.
- Real property consisting of an 8-lot subdivision in New Jersey.
Scientific equipment donated by an international tobacco firm.
The fair market values of donated assets are generally reported on IRS Form 8283, with noncash assets exceeding $5,000 requiring a qualified appraisal; if the noncash property is worth more than $500,000, the qualified appraisal must accompany the tax return when filed.1 For tax purposes, charitable contributions are only deductible if made to qualified organizations, and a donor cannot claim a deduction for any cash or other monetary gift unless a record of contribution in the form of either a bank record or a written communication from the charity is maintained.2 Donors must not receive any goods or services from the recipient in return for their contribution.
In addition to charitable donation valuation services, Appraisal Economics offers a wide variety of independent valuation services to the business, financial, and legal communities around the world. Our services include purchase price allocations, portfolio valuations, business valuations, and machinery and equipment valuations. To learn more about how our team of independent valuation experts can work for you, please call +1 201 265 3333 or click Contact Us.