CAC will provide qualified donors with a comprehensive vehicle appraisal report that complies with IRS guideline
New York, NY (PRWEB) September 30, 2015
Car Appraisals & Claims, America’s leading car appraisal company, is offering appraisal reports for vehicles being donated to charity that are worth more than $5,000.
Vehicle donation is one of the most effective ways of reducing tax liability, and it helps others obtain much-needed transportation. Individuals can deduct a donated car’s fair market value from their taxable income.
But if the claimed deduction for a vehicle is more than $5,000, the donor must submit an IRS-qualified car appraisal issued by a licensed professional. In addition, donors must attach an appraisal summary (Section B of Form 8283) to their tax returns. The appraisal must be made no more than 60 days before the vehicle is to be donated. Vehicles that are financed or that have liens cannot be donated.
Donors should be careful to select a qualified appraiser. The IRS describes a qualified appraiser as someone who regularly prepares appraisals for payment and who demonstrates competency in valuating the property being appraised — essentially, a fulltime professional who regularly performs appraisals and who holds a professional license, a valid business license, and a tax identification number.
Car Appraisals & Claims, operators of Diminished Value of Georgia and other prominent appraisal companies will provide qualified donors with a comprehensive vehicle appraisal report that complies with IRS guidelines. The valuation report costs $150 and includes:
- Description and physical condition of the vehicle
- Date of contribution
- Terms of the appraisal agreement
- Name and taxpayer identification number of the appraiser, as well as a signed IRS Form 8283
- Qualifications of the appraiser
- A statement that the appraisal was prepared for income tax purposes
- Date of appraisal
- The appraised FMV (Fair Market Value) of the vehicle
- The method of valuation used to determine FMV
- The specific basis of the appraisal, including comparable vehicles.
Appraisal reports must follow the comparable sale method that compares the donated property with several similar properties that have been sold. Fair Market Value cannot be determined by simply looking up the NADA value or Kelly Blue Book nor can it exceed the price of a similarly listed private party sale. In addition, FMV must be adjusted to account for the physical condition of the donated vehicle.
Appraisals must comply with IRS publication 561; reports need to be USPAP compliant and contain the appraiser's signature and certification. Appraisers are also required to sign IRS form 8283 and provide their tax identification numbers to the IRS.
The IRS does not require a physical inspection. Therefore, if the appraiser receives enough information to conduct a proper valuation, a sight-unseen appraisal is acceptable. Some appraisers offer on-site appraisals, which are typically more expensive.
Before donating their vehicles, donors should always research their chosen charities with the Better Business Bureau and confirm that the charities are properly registered with the IRS.
To learn more about charity car appraisals, or to order a report, please contact Car Appraisals & Claims at 877-667-2326.