IRS Definitions of "Qualified Appraiser" and "Qualified Appraisal" Continue to Evolve
Monday, January 11, 2010
From initial Act to final regulations: important appraisal-related issues continue to be refined
A taxpayer is generally permitted a deduction for noncash charitable contributions subject to certain limitations depending on the type of taxpayer, the nature of the property contributed, and the type of donee organization. When the deduction is permitted, taxpayers are required to obtain a qualified appraisal from a qualified appraiser for donated property for which a deduction of more than $5,000 is claimed.
Since tax deductions reduce the amount of tax collected by the federal government, Congress has tightened the rules governing appraisals in recent years in quest of discouraging valuation abuse, i.e., overstating the value of the contributed property. To accomplish this, relevant statutes were introduced embedded within the American Jobs Creation Act of 2004 (Jobs Act) and the Pension Protection Act of 2006 (PPA).
As of this writing, proposed Treasury regulations adopted in 2008 clear up many of the lingering issues, but they have yet to be finalized. Go here for a comprehensive review and current status of the regulations that will be defining the terms "qualified appraiser" and "qualified appraisal" for donation appraisals.
A taxpayer is generally permitted a deduction for noncash charitable contributions subject to certain limitations depending on the type of taxpayer, the nature of the property contributed, and the type of donee organization. When the deduction is permitted, taxpayers are required to obtain a qualified appraisal from a qualified appraiser for donated property for which a deduction of more than $5,000 is claimed.
Since tax deductions reduce the amount of tax collected by the federal government, Congress has tightened the rules governing appraisals in recent years in quest of discouraging valuation abuse, i.e., overstating the value of the contributed property. To accomplish this, relevant statutes were introduced embedded within the American Jobs Creation Act of 2004 (Jobs Act) and the Pension Protection Act of 2006 (PPA).
As of this writing, proposed Treasury regulations adopted in 2008 clear up many of the lingering issues, but they have yet to be finalized. Go here for a comprehensive review and current status of the regulations that will be defining the terms "qualified appraiser" and "qualified appraisal" for donation appraisals.
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