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Real Estate Donation Checklist

Determine Eligibility

For a real estate donation to be eligible for a tax deduction, it must be made solely for charitable or public purposes by an individual who will itemize deduction on Schedule A of form 1040 and is not taking the standard deduction. It must also be made to an organization that has a 501(c)(3) designation from the IRS.
TIPS
  • In order for this to be worth the extra effort and documentation, the total of the itemized deductions for that year would need to be more than the standard deduction one is entitled to in their specific circumstance.
  • To verify if the charity is eligible, look up in IRS pub 78, or call IRS Customer Account Services 877-829-5500. There are other charity databases, such as GuideStar.com, which list more information on the charity.

Determine the property’s value

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.”

Documentation

For real estate worth $5000 or less:
  • A receipt from the charity
  • Section A of the Form 8283 must be completed by the client and attached to their tax return

For real estate worth more than $5000

  • A receipt from charity
  • Section B of the Form 8283 must be signed by an authorized official of the charity
  • Written appraisal of the property’s value. This appraisal must be from a qualified appraiser and must be completed no more than 60 days before the donation and no later than the date of filing taxes.8