The value of real estate in term of tax deduction is measured by the fair market value of the property at the time of donation.
For property worth $5,000 or less, one may use the fair market value, as determined by comparable sales. For property worth more than $5,000, it must be appraised by a qualified appraiser.
Form 8283 must be filed with one’s federal tax return and the appraiser must sign the form.7
If the charity disposes of the property within three years, the IRS requires it to report the sale price on Form 8282.
Fair Market value is defined as “the price at which the property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts.” The rules relating to how to determine fair market value are addressed in IRS Publication 561, “Determining the Value of Donated Property.”