Charitable Donation Assistance

[n5ytt]

My wife had a brand new Permobil electric wheel chair that insurance paid over $35,000 for. She passed away and wasn't able to use it. It had about another $250 in usb, charging and cellphone holder added as options. I also donated a new wheel chair, walker, bedside commode and other associated DMW probably exceeding $38,000 in value. On itemizing deductions if i understood right it would need an appraisal due to the cost. 

It was brand new, as well as the other items. The items have been donated in June 2020, but i have a donation receipt from ALS Texas with serial numbers, and also took photographs of all items before donating. Another thought is claim half the donation this year and the other half next year, but believe would still require an appraisal that way also.

Thoughts and advice are appreciated in resolving this as is my final step in checking off preparing federal taxes.

[Opus 17]

I'm sorry for your loss.

You are correct that you must have a signed appraisal for any item where you claim a value of more than $5000.  You may not split the deduction, you must claim all donations made in 2020 on your 2020 tax return.

I have no idea how to value such an item in used condition.  Sometimes, custom items like that are worth very little on the secondary market.  Maybe you can take your pictures and other information to a medical supply store or salesperson to get an appraisal.  The appraiser does not need to have a formal license, but they must have expertise valuing whatever kind of item you are talking about.  The appraiser must also sign a copy of form 8283 listing the donation, and form 8283 must also be signed by a financially responsible official from the charity.  

If you list the donations in Turbotax, Turbotax will e-file the form 8283 and then have you print out a copy.  You would get that signed by the appraiser and the charity, and then mail it to the IRS after e-filing the rest of your return.

Without those signatures, the most you could claim for the power chair is $5000.  You can list the wheelchair, walker and other items separately, the appraisal requirement is not triggered if your total donations are more than $5000, only if any single item is more than $5000.  

Full details are in the instructions for form 8283,

https://www.irs.gov/instructions/i8283

[Opus 17 · Accepted solution]

There is another set of rules that takes priority over the appraisal rules.  This is important.  I should have paid more attention when you said the power chair was paid for by insurance.

If you owned the chair less than 1 year, your maximum donation value is what you paid for it, regardless of its actual value.  For example, if you paid a $500 co-pay, the value of your donation is $500.  If you paid nothing, the value of your tax deduction is zero.

If you owned the chair more than 1 year, and you donated it to a charity that will sell it for fundraising, your maximum donation value is also only what you paid for the chair.

If you owned the chair more than 1 year, and you donated to a charity that will use it as a power wheel chair to help other people with mobility problems, then you can claim the fair market value.  (The charity might donate it to a needy handicapped person, or maybe you donated it to a church that will use it when handicapped people need assistance to attend Sunday services, etc.).  However even here, you can't claim a value over $5000 without a signed appraisal, and the charity must complete IRS Form 8282 and send it to the IRS to verify the donation. 

These rules are in publication 526, https://www.irs.gov/pub/irs-pdf/p526.pdf