Printable Form 2026

IRS Publication 561 – IRS Forms, Instructions, Pubs 2026

IRS Publication 561 – IRS Forms, Instructions, Pubs 2026 – If you donate non-cash property to charity and want to claim a tax deduction, you must determine its fair market value (FMV) correctly. The IRS provides clear rules in Publication 561 to help donors, appraisers, and tax professionals value donated items accurately and avoid costly penalties.

This comprehensive guide summarizes the key points from the official IRS Publication 561 (December 2024 edition), available as a free PDF download here: https://www.irs.gov/pub/irs-pdf/p561.pdf. It covers FMV rules, property-specific valuation methods, appraisal requirements, Form 8283, substantiation rules, and more—updated for current tax law as of 2025.

What Is IRS Publication 561?

Publication 561 explains how to determine the value of property (other than cash) donated to qualified organizations for charitable contribution deductions on your income tax return. It applies to income, gift, and estate taxes but focuses primarily on noncash contributions after January 1, 2019.

It does not cover how much you can actually deduct (see Publication 526) or basic recordkeeping, but it is essential for supporting your claimed deduction amount.

Key update in the 2024 revision: New disallowance rules for certain qualified conservation contributions made by partnerships or S corporations (if the contribution exceeds 2.5 times the sum of each ultimate member’s relevant basis, unless an exception applies).

Understanding Fair Market Value (FMV)

The cornerstone of Publication 561 is FMV — the price the property would sell for on the open market between a willing buyer and a willing seller, neither under any compulsion to buy or sell, and both having reasonable knowledge of all relevant facts.

FMV is determined on the exact date of contribution (usually when you deliver the property or transfer title to the charity).

Factors That Affect FMV

Use these four main factors (detailed in Table 1 of Pub 561):

  • Cost or recent selling price
  • Sales of comparable properties
  • Replacement cost (minus depreciation)
  • Opinions of qualified appraisers

Always consider the property’s condition, scarcity, market demand, location, and any restrictions.

Example: Used clothing in “good used condition or better” has FMV based on what typical buyers pay at thrift stores—not original retail price.

Real-world example of donated clothing and household goods valuation guides (common thrift-store estimates).

Valuation Rules by Type of Donated Property

Publication 561 provides specific guidance for common donation categories.

1. Clothing and Household Items

  • Deduction allowed only if the items are in good used condition or better (with limited exceptions).
  • FMV is typically a fraction of original cost—use thrift store comparable sales.
  • Items worth more than $500 that are not in good condition require a qualified appraisal and Form 8283 Section B.

2. Cars, Boats, and Aircraft (Qualified Vehicles)

  • If the claimed deduction exceeds $500, the deduction is generally limited to the gross proceeds from the charity’s sale (unless the charity makes significant use of the vehicle).
  • Use private-party sale guides (e.g., Kelley Blue Book “private party” value), not retail or trade-in values.

Recordkeeping and filing requirements for vehicle donations (from IRS guidance).

3. Art, Jewelry, Collectibles, and Gems

  • Items or groups of similar items valued over $5,000 require a qualified appraisal.
  • For art valued at $20,000+: Attach appraisal to Form 8283; IRS may request photos.
  • For art valued at $50,000+: Consider requesting an IRS Statement of Value (fee applies).
  • Factors: Authenticity, provenance, physical condition, market comparables, and (for jewelry) gemological certificates.

Professional appraisal documentation example and required elements for charitable donation appraisals.

4. Stocks, Bonds, and Securities

  • Publicly traded: Average of highest and lowest quoted prices on the contribution date (or weighted average if no sales that day).
  • Closely held or restricted securities: Require professional valuation.

5. Real Estate and Partial Interests

  • Almost always requires a professional appraisal using comparable sales, income capitalization, or replacement cost approaches.
  • Special rules for qualified conservation contributions (easements), remainder interests, and undivided fractional interests.

When Is a Qualified Appraisal Required?

  • Generally required for noncash contributions (or groups of similar items) valued over $5,000.
  • Exceptions: Publicly traded securities, certain vehicles, inventory, and qualified intellectual property.
  • Clothing/household items over $500 (not in good condition) also trigger the requirement.
  • The appraisal must be:
    • Prepared by a qualified appraiser who follows Uniform Standards of Professional Appraisal Practice (USPAP) and IRS regulations.
    • Signed and dated no earlier than 60 days before the contribution and no later than your tax return due date (with extensions).

For deductions over $500,000 of certain property: You must attach the full qualified appraisal to your return.

Required Documentation: Form 8283 and More

You must substantiate every noncash donation:

  • Contemporaneous Written Acknowledgment (CWA) from the charity (for any single contribution of $250+).
  • Form 8283, Noncash Charitable Contributions:
    • Section A: Donations $500–$5,000 (and certain lower-value items).
    • Section B: Donations over $5,000 (requires appraisal summary).

Examples of IRS Form 8283 (Section A and Section B for higher-value property).

The donee organization must sign Part IV of Section B (appraisal summary) in most cases.

Penalties for Overvaluation

The IRS can impose accuracy-related penalties (20% or 40%) on underpayments resulting from substantial or gross valuation misstatements. Appraisers can also face penalties for aiding overstated valuations.

Common Mistakes to Avoid

  • Claiming retail price instead of FMV for used items.
  • Skipping Form 8283 or qualified appraisals when required.
  • Using “forced sale” or liquidation values.
  • Forgetting that the charity’s acknowledgment cannot state a value (only description).
  • Donating partial interests without meeting strict exceptions.

Pro Tip: Keep detailed records including photos, receipts, comparable sales data, and the full appraisal report.

How to Access IRS Publication 561 and Get Help?

For complex donations (especially art, real estate, or conservation easements), always work with a qualified appraiser and a tax professional or CPA.

Frequently Asked Questions (FAQ)

  • Q: Do I need an appraisal for donating clothes worth $600?
    A: Only if they are not in good used condition or better. Otherwise, document FMV with comparable sales and file Form 8283 if total noncash > $500.
  • Q: What if the charity sells my donated car for less than I claimed?
    A: Your deduction is generally limited to the actual gross proceeds (if > $500).
  • Q: Can I deduct the cost of the appraisal?
    A: No—appraisal fees are not deductible as part of the charitable contribution.
  • Q: Is Publication 561 updated every year?
    A: It is revised as needed; the current version is December 2024. Always check IRS.gov for the latest.
  • Q: Where do I find qualified appraisers?
    A: Look for professionals who follow USPAP and are experienced in the specific property type (e.g., art appraisers, real estate appraisers). The IRS does not maintain a list.

Donating to charity is generous—and properly valuing your gifts using IRS Publication 561 can provide significant tax benefits while keeping you compliant. For personalized advice, consult a tax professional or use the IRS Interactive Tax Assistant tools.

This article is for informational purposes only and is based directly on official IRS sources as of February 2026. Tax laws can change; verify with the latest IRS publications or a qualified advisor.