Donated Property Worth More Than $5,000? The IRS Has A Strict Three-step Checklist.
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You donated property to charity — artwork, real estate, collectibles, even Bitcoin. You expect a deduction equal to fair market value.
But the IRS has strict substantiation rules for non-cash gifts over $5,000, and missing even one step can result in the entire deduction being denied — even if the donation itself was completely legitimate.
Overvalue the donated property and the penalty jumps to 40 percent of the tax underpayment if the appraised value was 200 percent or more of the actual fair market value.