Now, a decade later, the Service has issued its final rules, which apply to all contributions made on or after January 1, 2019. The gist of it is that you need a qualified appraiser to provide you with a qualified appraisal document of the value of the gift you’re making to charity—but the devil is in the details. Now, the qualified appraiser is defined as somebody who has completed professional or college-level coursework in evaluating the type of property you are donating, and has two or more years of experience in valuing that type of property. This person should also have received a “recognized appraiser designation” awarded by a professional organization. Your uncle Fred, who has a pretty good eye for the value of jewelry, will no longer be able to give the IRS an acceptable appraisal.
The appraisal document should describe the item to be donated in layperson’s terms, and estimate the fair market value, and provide an effective date of the valuation. There should also be a discussion of any terms of agreement or understanding of how the item will be used; that is, if it is to be displayed (as in a museum) or sold (as in a charitable organization). The report must be signed and dated by the qualified appraiser no earlier than 60 days before the date of the contribution.
Obviously (although the regulations specify this), the item must be donated before the due date of the donor’s tax return in which the charitable deduction is claimed.
This sounds like an expensive headache, and it probably will be for many donors of appreciated property, art or valuables. Worse, there has to be a separate qualified appraisal for each item of property being donated. However, the IRS has ended a particularly expensive practice that carries with it a conflict of interest: qualified appraisers can no longer base their fees on the appraised value of the property in question.