widget
Ideal_Rock
- Joined
- Nov 12, 2004
- Messages
- 4,255
HI:Date: 2/16/2007 10:47:39 PM
Author:
I just got back from selling some old jewelry. I have a couple 'higher end' pieces that I bought many years ago when I was stupid and ignorant. I'm horrified and ashamed of how much I spent on them....now I'm equally horrified at how little I can get for them now.
widget
However, if the donated property is personal (versus real) property and it is put to use in a function unrelated to the charity's purpose, your contribution deduction is limited to its cost.
For example, if a painting contributed to an educational institution is used by that organization for educational purposes by being placed in its library for display and study by art students, the use is not an unrelated use. But if the painting is sold and the proceeds are used by the organization for educational purposes, the use is an unrelated use. If the property will be put to an unrelated use, then you're better off selling it, recognizing the gain and claiming an offsetting deduction for the proceeds.
Assuming your contribution is to a museum, for example, you can get a deduction for value without having to go through the effort of selling the pieces. However, if the value of the jewelry collection exceeds $5,000, you'll be jumping through some hoops to claim the deduction. Publication 561 describes the procedures for claiming a charitable contribution of property with a value in excess of $5,000. For one thing, you'll need a qualified appraisal, by a qualified appraiser. The publication describes the following considerations when valuing jewelry:
Jewelry and gems are of such a specialized nature that it is almost always necessary to get an appraisal by a specialized jewelry appraiser. The appraisal should describe, among other things, the style of the jewelry, the cut and setting of the gem and whether it is now in fashion. If not in fashion, the possibility of having the property redesigned, recut or reset should be reported in the appraisal. The stone's coloring, weight, cut, brilliance and flaws should be reported and analyzed. Sentimental personal value has no effect on fair market value. But if the jewelry was owned by a famous person, its value might increase.
ask 10 accountants and you will get 8 different answers.Date: 2/17/2007 9:53:45 PM
Author: Beacon
Thank you so much for this information.
I still am slightly puzzled. Almost certainly the charity will sell my jewelry donation. So, is my deduction limited to their realized sale value once they sell it or, since I have a very thorough appraisal and original sales receipt, can I deduct the appraised value (very close to sales receipt value)? The charity is willing to give a letter stating the appraised value as the amount of my contribution, while of course specifying that it is a contribution of jewelry, not cash.
It certainly is confusing!!