Charitable Donation Appraisal for Real Estate: What the IRS Requires

If you plan to give a house, a parcel of land or a multi-family building to a charity and deduct it, the IRS expects a written appraisal from a qualified appraiser. It must be dated in the right window, and it must be attached to the right forms. Miss one of those steps and the deduction can be disallowed, even when the property was worth every dollar you claimed.

This guide walks through when the appraisal is required, who counts as a qualified appraiser, what the report must contain, and the mistakes that cause trouble. It is written for New Jersey donors, and for the attorneys, CPAs and financial advisors who work with them. The tax rules are federal and apply in every state.

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TL;DR

For a donated property with a claimed deduction above $5,000, the IRS requires a qualified appraisal from a qualified appraiser, and Form 8283 must be attached to your return.
The appraisal must be signed and dated no earlier than 60 days before you contribute the property, and you must have it before the return's due date, including extensions.
The charity cannot be your appraiser, and the appraiser's fee cannot be a percentage of the value concluded.
Tell the appraiser everything. An appraisal built on missing or false facts can be disregarded.
Start before the gift closes, not at tax time.

When a real estate gift needs an appraisal
Who is a qualified appraiser
What a qualified appraisal must contain
Timing: the 60-day window and the filing deadline
Fee rules that protect the deduction
Be complete and honest with your appraiser
Special cases
What happens after the gift
Our perspective
Getting a New Jersey property appraised for a donation
FAQ
Sources

When a real estate gift needs an appraisal

The threshold depends on the size of the deduction you claim, not on the price you paid.

Claimed deduction	What the IRS expects
Over $500 in total noncash gifts	Form 8283 filed with your return
Over $5,000 for one property (or group of similar items)	Qualified appraisal, plus Form 8283 Section B

The Form 8283 instructions state that items in Section B are those for which you claimed a deduction of more than $5,000, and that these items require a written qualified appraisal. Real estate almost always clears that bar. A modest suburban home or a single building lot in New Jersey is worth far more than $5,000.

Two details trip up donors:

Each donee and each property is separate. The instructions call for a separate Section B for each donee organization and each item of property. If you split a gift of two parcels between two charities, plan on separate paperwork for each.
A tiny deduction does not exempt a gift from scrutiny. Below the threshold you still need the right records, but the formal appraisal rule is tied to the amount you claim.

If you are unsure whether your gift crosses the line, talk to your CPA or tax attorney before the gift is made. They can estimate the deduction. We can then tell you what an appraisal would involve.

Who is a qualified appraiser

This is the requirement donors misunderstand most. "Qualified appraiser" is a defined status under Treasury Regulation 1.170A-17, not a general compliment. The regulation looks at the appraiser's education, coursework and experience, and requires a declaration in the report about those qualifications and about the appraiser's understanding that the report is used for tax purposes.

What that means in practice:

A real estate agent or broker with a strong sense of the local market is not automatically qualified for IRS purposes. The regulation sets specific education and experience thresholds, including a minimum period of experience valuing the type of property involved.
The charity receiving the gift is not permitted to act as your qualified appraiser for the deduction, according to the Form 8283 instructions. A charity can tell you what it will accept, and it can have its own view of value for resale. Neither replaces your independent appraisal.
Appraisers who are state-certified and follow the Uniform Standards of Professional Appraisal Practice (USPAP) are the natural starting point. The Appraisal Foundation explains that USPAP is the quality-control framework courts and the IRS lean on to keep appraisals objective and supported by market evidence.

Ask any appraiser you are considering to confirm in writing that they meet the Section 1.170A-17 definition for your gift. A good one will answer without hesitation.

What a qualified appraisal must contain

The regulation requires an appraisal document prepared in accordance with USPAP. Among other items, it must include:

A detailed description of the property
The valuation effective date
The method of valuation used, such as the sales comparison, income or cost approach
The appraiser's qualifications and the declaration described above

The effective date matters. The valuation date must fall between 60 days before the contribution and the date of the contribution itself. The Form 8283 instructions add that the appraisal must be signed and dated no earlier than 60 days before you contribute the property.

Why the method matters for real estate

IRS Publication 561 says plainly that because each piece of real estate is unique and its valuation is complicated, a detailed appraisal by a professional is necessary. A broker price opinion, an online estimate or a tax assessment does not meet that standard.

For a house, the sales comparison approach usually carries the most weight, supported by closed sales of similar homes. Income-producing property such as a multi-family building brings in the income approach as well. Land depends on comparable land sales and on what zoning and environmental factors allow. If you want a plain-language look at how these approaches differ, this overview of property valuation methods is a useful companion to the explanation here.

Highest and best use and condition

The appraiser has to value the property as it actually is. That means condition, deferred maintenance, layout, permitted uses and any restrictions that run with the land. A house that needs a new roof and has an old oil tank is worth less than the same house in good order, and the report should say so. We cover the documents that support those conclusions in our guide to property valuation documents.

Timing: the 60-day window and the filing deadline

Two clocks run at once.

The 60-day window. The appraisal is signed and dated no earlier than 60 days before the date of the gift. An appraisal done in January for a December closing is too old.
The filing deadline. You must receive the qualified appraisal before the due date, including extensions, of the return on which you first claim the deduction. If you first claim it on an amended return, you must have it before you file that amended return.

A workable sequence looks like this:

Decide with your advisors that you will donate, and confirm the charity will accept the property.
Agree on the likely closing date with the charity and the attorney handling the transfer.
Engage the appraiser so the report is signed within 60 days before that date.
Review the draft for accuracy, then receive the signed report.
Complete the transfer, then give your CPA the report for Form 8283.

The usual mistake is waiting until tax season. By then the gift is done, the date window may already be blown, and no appraiser can fix that. Closings also slip. If your date moves by a few weeks, check whether the report is still inside the window.

Fee rules that protect the deduction

An appraiser cannot base the fee on a percentage of the appraised value. The Form 8283 instructions treat that kind of arrangement as disqualifying because it gives the appraiser a stake in a higher number. Insist on a flat or hourly fee, or a fixed project fee, agreed before the work starts. If an appraiser suggests otherwise, walk away.

It is also worth separating the roles. The appraiser should have no ownership in the property, no interest in the charity's decision and no reason to prefer one number over another.

Be complete and honest with your appraiser

The regulation says an appraisal can be disregarded if the donor fails to disclose, or misrepresents, facts to the appraiser. That is a risk donors rarely think about. If you leave out a pending sale offer, an open permit, a known environmental issue or a lease, the report is built on an incomplete picture, and the deduction is exposed.

Bring everything:

The deed and any recorded easements or restrictions
Recent surveys, title work, and the purchase price and date
Leases and rent rolls for any rented unit
Receipts and permits for improvements, plus any known defects
Any offers or listing history within the past few years

Our article on the disclosure process in real estate valuation explains what appraisers ask for and why. For tips on working with the appraiser day to day, see how to communicate with appraisers.

Special cases

Conservation and façade easements

If you donate an easement rather than the whole property, the IRS generally expects a "before and after" valuation. The appraiser values the property immediately before the easement is granted and again immediately after. The difference is the value of the easement. The IRS easement guidance rejects using a flat percentage reduction. These gifts draw close attention, so work with your tax attorney from the start.

Before-and-after property valuation for an easement donation

Fractional interests

Giving a share of a property, for example a half interest, raises discount questions that a standard appraisal does not answer. See our piece on fractional interest appraisals for how those are handled in estate, gift and divorce contexts.

Property from an estate

Executors sometimes carry out a decedent's wish to give a property to a charity. The date-of-death value for estate tax or inheritance tax is a different assignment, with a different valuation date, from a charitable appraisal. Do not assume one report serves both. Our guide for executors preparing Form 706 appraisals and the New Jersey estate appraisal checklist explain the estate side.

What happens after the gift

The charity has its own obligations. The IRS notes that if a charity sells or otherwise disposes of donated charitable deduction property within three years, it generally must file Form 8282. The IRS can then compare the sale price with the value you claimed. A large gap invites questions, which is another reason the report needs to be well supported by comparable sales, not by optimism.

Keep a copy of the signed appraisal, Form 8283, the charity's acknowledgment and your closing documents together. Our guide on organizing home valuation paperwork offers a simple filing system.

Our perspective

Most donors come to us thinking of the appraisal as a form to be filled out. We see it differently. The appraisal is the evidence that the IRS reads when it decides whether your number holds. A report that is thin on comparable sales, vague on condition or silent on restrictions is a weak foundation, even when the property is excellent.

We approach a charitable assignment the way we approach a divorce, estate or tax appeal valuation. We have more than 26 years of appraisal and real estate experience, including hands-on renovation and fix-and-flip work, so we look at what is actually in front of us: workmanship, layout, deferred maintenance, location influences and how a buyer would react. We use professional data sources beyond basic MLS data to verify market evidence, and we develop conclusions under USPAP.

Our advice to donors is simple. Call before the closing date is set. Bring everything, including the awkward facts. Agree to a fixed fee. And treat the 60-day window as a hard deadline. Those four habits prevent most of the problems we see.

— Alek Petreski

Getting a New Jersey property appraised for a donation

We are a state-certified appraisal firm serving homeowners, attorneys, executors, CPAs and financial professionals throughout New Jersey. Residential appraisals are published at $495 to $750, and commercial appraisals at $2,500 to $10,000 on our commercial appraisal page. Final fees depend on the property and the assignment. Tell us that the purpose is a charitable gift, the donee and your expected closing date, and we will confirm the scope and timing before you commit. For multi-property or unusual assignments, see our full list of services.

FAQ

Can the charity appraise the property I donate?

No. The Form 8283 instructions say the donee organization cannot act as your qualified appraiser. The charity may have its own estimate of value, but you need an independent report from a qualified appraiser for your deduction.

How old can the appraisal be?

It must be signed and dated no earlier than 60 days before the date you contribute the property. It must also be in your hands by the due date, including extensions, of the return where you first claim the deduction. If your closing date slips well past the report date, ask whether an update is needed.

Is a tax assessment or an online estimate enough?

No. For a gift above $5,000 you need a qualified appraisal prepared under USPAP by a qualified appraiser. Publication 561 states that a detailed professional appraisal is necessary for real estate because each property is unique. Assessments and automated estimates do not provide that.

Can I pay the appraiser a percentage of the value?

No. A fee tied to the appraised value can disqualify the appraisal for tax purposes. Agree on a flat, hourly or fixed project fee up front.

Do I need a separate appraisal for each charity?

You need a separate Form 8283 Section B for each donee and each property, per the IRS instructions. Ask your CPA whether one report can support more than one filing. Discuss it with the appraiser before the work begins.

Sources