Fair Market Value.pdf

The fair market value (FMV) of donated property is the price that property would sell for on the open market, agreed upon by a willing buyer and seller with reasonable knowledge of the relevant facts. To determine FMV, consider factors such as:

Cost or selling price of the item
Sales of comparable properties
Replacement cost
Opinions of professional appraisers

The date of contribution is typically the date the property is delivered to the charity or the title transfer date, provided no right to or interest in the property is retained.

Valuation of Specific Types of Property

Used clothing: FMV is the price typical buyers pay for similar items
Jewelry: FMV is not the insured value, but the price a willing buyer and seller would agree upon
Stock: FMV is determined on the date of delivery or transfer
Options: FMV is determined on the date the option is exercised, minus the exercise price

Substantiation of Noncash Charitable Contributions

Donors must have sufficient information to support the income tax charitable contribution deduction claimed on their return. This includes:

Description of the property
FMV of the property
Date of contribution
Name and address of the charity

Penalty

Failure to substantiate noncash charitable contributions may result in disallowance of the deduction.

How to Get Tax Help

For more information, visit IRS.gov or consult Publication 526, Charitable Contributions. Forms and instructions can be downloaded from IRS.gov or ordered by phone or mail.