Form 8283 Case Sample
Facts:
Joan Smith, a single mom has been collecting rare coins for the last several years. She is getting old and in 2014, she gathered her coins and took them to her longtime friend who owns several pawn shops in Houston. The owner of the pawn shop valued these coins at $80,000. She donated the coins to a public charity and deducted $80,000 charitable deduction on her 2014 tax return. The IRS denied the deduction.
Statement of Law
The reason for the denied deduction was due to failure to meet substantiation requirements of obtaining a qualified appraisal on your noncash donation. This is due to appraisals over $5,000 having requirements that include obtaining a qualified appraisal from an independent appraiser and the taxpayer must submit an appraisal summary on Form 8283 with their tax return.
The Internal Revenue Service Code provides the following grounds for charitable contributions and related deductions:
“ 26 U.S. Code § 170 Charity, etc., …show more content…
In fact, the statements Joseph attached to the Forms 8283 did not indicate that they were appraisals at all. If Joseph had hired a qualified appraiser, the lack of appraisal summaries might not have been a problem--section 1.170A-13(c)(4)(iv)(H), Income Tax Regs., says that if a donor forgets to attach the appraisal summary, the IRS can request it and the taxpayer can still get the deduction if he submits the summary within 90 days of the request. But the underlying appraisal still has to be a qualified appraisal completed before the due date of the tax return, and the appraisal summary must still contain the information required by section 1.170A-13(c)(4)(ii), Income Tax Regs. Sec. 1.170A- 13(c)(4)(iv)(H), Income Tax Regs. Since Joseph did not seek an independent appraisal until after the audits started (well after his returns were due), he did not find refuge in this
Joan Smith, a single mom has been collecting rare coins for the last several years. She is getting old and in 2014, she gathered her coins and took them to her longtime friend who owns several pawn shops in Houston. The owner of the pawn shop valued these coins at $80,000. She donated the coins to a public charity and deducted $80,000 charitable deduction on her 2014 tax return. The IRS denied the deduction.
Statement of Law
The reason for the denied deduction was due to failure to meet substantiation requirements of obtaining a qualified appraisal on your noncash donation. This is due to appraisals over $5,000 having requirements that include obtaining a qualified appraisal from an independent appraiser and the taxpayer must submit an appraisal summary on Form 8283 with their tax return.
The Internal Revenue Service Code provides the following grounds for charitable contributions and related deductions:
“ 26 U.S. Code § 170 Charity, etc., …show more content…
In fact, the statements Joseph attached to the Forms 8283 did not indicate that they were appraisals at all. If Joseph had hired a qualified appraiser, the lack of appraisal summaries might not have been a problem--section 1.170A-13(c)(4)(iv)(H), Income Tax Regs., says that if a donor forgets to attach the appraisal summary, the IRS can request it and the taxpayer can still get the deduction if he submits the summary within 90 days of the request. But the underlying appraisal still has to be a qualified appraisal completed before the due date of the tax return, and the appraisal summary must still contain the information required by section 1.170A-13(c)(4)(ii), Income Tax Regs. Sec. 1.170A- 13(c)(4)(iv)(H), Income Tax Regs. Since Joseph did not seek an independent appraisal until after the audits started (well after his returns were due), he did not find refuge in this