The value of donated property is in the eye of the marketplace

Description

Abstract: Nonprofits often struggle with valuing noncash and in-kind donations, including the value of houses or other buildings. Although the amount that a donor can deduct generally is based on the donation's fair market value (FMV), there's no single formula for calculating FMV for every type of gift. This article discusses the basics of FMV, along with three FMV factors the IRS regards as particularly relevant. A sidebar explains when donors need to seek an appraisal.