Categories: General Tax Terms
Fair Market Value of Donated Property
The Fair Market Value of Donated Property is the estimated price that property would sell for on the open market, under normal conditions, between a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts. This value is crucial for determining the tax deduction that a donor can claim when they donate property to a charity.
For example, if an individual donates a piece of artwork that has a fair market value of $5,000 at the time of the donation, they may be eligible to claim a charitable deduction of that amount on their tax return, provided they meet IRS requirements for substantiating the donation.
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