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ASA Receives Clarification from IRS Regarding “Similar Items” for Charitable Contribution Assignments

by John Russell, JD | Sep 23, 2019
 
ASA asked the IRS for clarification following remarks made during ASA’s Personal Property conference in Santa Fe, New Mexico about “similar items” included in appraisal reports prepared for charitable contribution deductions.

The Internal Revenue Service (IRS) has responded to ASA to clarify the application of the phrase “similar items” and its impact when preparing these appraisals. IRS provided the following information for ASA to pass along:
  • Dissimilar items must be handled separately on separate Forms 8283 but can be in one Appraisal Report as long as they are in separate “chapters” or “sections.” Publication 561 (under the heading Deductions of More than $5,000 on page 9) explains what is meant by “similar Items.” It identifies examples of items specifically not considered “similar” and separates these items by commas. For example, china cannot be considered together with everyday kitchenware, and lithographs cannot be considered together with paintings. ·
  • When dealing with two or more items, where each item is BELOW the $5,000 threshold AND the items are NOT “similar,” the taxpayer can submit Form 8283 without an appraisal performed to support the claimed deductions. Therefore, the term “aggregate” does not apply to dissimilar items.
  • When dealing with two or more items, where each item is ABOVE the $5,000 threshold AND the items are NOT “similar,” the taxpayer MUST obtain an appraisal that includes the items above the threshold, and have the appraiser(s) sign a Form 8283 for each item. However, this can be done in a single Appraisal Report if the items are going to ONE donee on the SAME effective date (the date of title transfer).
  • When dealing with two or more items, where each item is BELOW the $5,000 threshold BUT are “similar” to each other and, in the aggregate, EXCEED $5,000, an appraisal must be performed of the “similar” items and the appraiser(s) must sign Form 8283 (and, in the case of multiple donees, separate 8283’s for each donee). An appraisal is needed, even when the items are going to separate donees but the aggregate is over $5,000.
ASA appreciates the response from IRS regarding our concerns.