Dear Mr. Azrael:
I own a building lot which I intend to donate to church. What is an acceptable standard to use to determine value? And, how do you determine the amount to be deducted?
Mark E. Cooper
Dear Mr. Cooper:
When property held for more than one year is donated to a bona fide church, charity or educational institution, the donor is entitled to a deduction equal to the fair market value of the property on the date of the gift. For example, a $10,000 deduction is allowable if the property has a fair market value of $10,000 at the time the deed is signed and delivered to the church.
The taxpayer should be prepared to support the amount of the deduction for donated real estate by an independent appraisal from a qualified appraiser or real estate professional.
The amount of charitable deduction in any one year is limited to a percentage of the taxpayer's gross income. The portion of the value of the donation that cannot be deducted in the year of the gift may be carried forward and deducted in subsequent years.
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