It depends on the amount you are able to deduct. See below to calculate the deductible amount. You will need to know how much you initially paid for it.
Noncash Contributions
For a contribution not made in cash, the records you must keep
depend on whether your deduction for the contribution is:
- *Less than $250,
- At least $250 but not more than $500,
- Over $500 but not more than $5,000, or
- Over $5,000.
-
Deductions Over $5,000
If you claim a deduction of over $5,000 for a noncash charitable
contribution of one item or a group of similar items, you must have the
acknowledgment and the written records described under Deductions Over $500 but Not
Over $5,000 . Generally,
you must also obtain a qualified written appraisal of the donated property
from a qualified appraiser. See Deductions of More
Than $5,000 in Pub. 561 for more information.
In figuring whether your deduction is over $5,000, combine your
claimed deductions for all similar items donated to any charitable
organization during the year.
-
Deduction over $5,000 for one
item.
You must complete Section B of Form 8283
for each item or group of similar items for which you claim a deduction of
over $5,000. (However, if you contributed publicly traded securities,
complete Section A instead.) In figuring whether your deduction for a
group of similar items was more than $5,000, consider all items in the
group, even if items in the group were donated to more than one
organization. However, you must file a separate Form 8283, Section B, for
each organization. The organization that received the property must
complete and sign Part IV of Section B
How to calculate:
Giving Property That Has Increased in ValueIf you contribute property with a fair market value that is more than your basis in it, you may have to reduce the fair market value by the amount of appreciation (increase in value) when you figure your deduction.
Your basis in property is generally what you paid for it. If you need more information about basis, see Pub. 551.
Different rules apply to figuring your deduction, depending on whether the property is:
Property is ordinary income property if you would have recognized ordinary income or short-term capital gain had you sold it at fair market value on the date it was contributed. Examples of ordinary income property are inventory, works of art created by the donor, manuscripts prepared by the donor, and capital assets (defined later, under Capital Gain Property ) held 1 year or less.
Amount of deduction.
The amount you can deduct for a contribution of ordinary income property is its fair market value minus the amount that would be ordinary income or short-term capital gain if you sold the property for its fair market value. Generally, this rule limits the deduction to your basis in the property.
Example.
You donate stock you held for 5 months to your church. The fair market value of the stock on the day you donate it is $1,000, but you paid only $800 (your basis). Because the $200 of appreciation would be short-term capital gain if you sold the stock, your deduction is limited to $800 (fair market value minus the appreciation).
