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Musical Instrument Donated to Charitable Foundation

I have donated a professionally appraised musical instrument to a foundation who supports aspiring professional musicians with instruments to start their careers.  I have the paperwork for both the appraised value and receipt of the instrument by the foundation.  The original purchase price was $6000 in 1973 by my mother.  It is now appraised much higher.  How does the tax deduction work for this?  

Karen P

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1 Best answer

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Opus 17
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

Musical Instrument Donated to Charitable Foundation

There are a couple of points here that may not have been previously addressed.

 

First, this is an item of tangible personal property that has increased in value. As such, you can deduct the appraised value if the object is being donated to an organization that will put the object to use for its intended purpose. If the organization is going to sell the object to raise funds, you can only deduct your cost basis, which is the amount originally paid for the object either by yourself, or by the person who gave it to you.

 

Second, because the item has a value over $5000 (using either the current appraisal or the cost basis) you must have a form 8283 signed by the appraiser and by a financially responsible officer of the organization.  When you prepare your tax return in TurboTax, you will provide all of the relevant information about the donation and TurboTax will prepare an electronic version of form 8283 that will be submitted when you e-file your return. TurboTax will also instruct you to print a cover sheet and you must mail the cover sheet and the original signed form 8283 within three days of e- filing. Keep copies of the signed form 8283 for your records.  Use a mailing service that provides tracking and proof of delivery.    The donee organization must sign a statement attesting that if they stop using the object for its intended purpose within three years, they will be required to provide you with a copy of form 8282, and you will have to amend your tax return to remove or reduce the value of the donation.

 

 

So between now and tax season, you need to download and print a copy of form 8283, fill in all of the required donation information, and then send it to the organization and to the appraiser for their original signatures.

 

The form and instructions are here. 
https://www.irs.gov/forms-pubs/about-form-8283

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3 Replies

Musical Instrument Donated to Charitable Foundation

@karenp2 - you can claim it as a donation assuming you itemize your deductions (which given how much the dnoation  was probably is the way to go) .  it's rather simple. 

Musical Instrument Donated to Charitable Foundation

you complete form 8283 section b non-cash contributions to charity. Turbotax should take you through all the info that needs to be supplied. keep that appraisal. it is not attached to the return but the IRS could ask for it at a later date so keep it safe.

you'll also have to find out whether the foundation is a 50%, 30% charity or 20%. because that determines what % of AGI can be offset by the contribution in the current year

 

my guess is that this is a 30% charity

you can use the iRS search tool

https://apps.irs.gov/app/eos/ 

once found click on the name to find a 2 letter deductibility code

PC means it's a 50% charity

POF means it's a private operating foundation 30% limit

PF means private foundation 20% limit

 

you must itemize your deductions

if you itemize and the fair value exceeds the % of AGI listed above the balance is a carryover to future tears. 

 

 

 

 

 

Opus 17
Level 15
Intuit Approved! This answer has been verified for accuracy by an Intuit expert employee

Musical Instrument Donated to Charitable Foundation

There are a couple of points here that may not have been previously addressed.

 

First, this is an item of tangible personal property that has increased in value. As such, you can deduct the appraised value if the object is being donated to an organization that will put the object to use for its intended purpose. If the organization is going to sell the object to raise funds, you can only deduct your cost basis, which is the amount originally paid for the object either by yourself, or by the person who gave it to you.

 

Second, because the item has a value over $5000 (using either the current appraisal or the cost basis) you must have a form 8283 signed by the appraiser and by a financially responsible officer of the organization.  When you prepare your tax return in TurboTax, you will provide all of the relevant information about the donation and TurboTax will prepare an electronic version of form 8283 that will be submitted when you e-file your return. TurboTax will also instruct you to print a cover sheet and you must mail the cover sheet and the original signed form 8283 within three days of e- filing. Keep copies of the signed form 8283 for your records.  Use a mailing service that provides tracking and proof of delivery.    The donee organization must sign a statement attesting that if they stop using the object for its intended purpose within three years, they will be required to provide you with a copy of form 8282, and you will have to amend your tax return to remove or reduce the value of the donation.

 

 

So between now and tax season, you need to download and print a copy of form 8283, fill in all of the required donation information, and then send it to the organization and to the appraiser for their original signatures.

 

The form and instructions are here. 
https://www.irs.gov/forms-pubs/about-form-8283

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