If you donate real estate to charity, a signed appraisal by a qualified third-party will be required to support the tax deduction. You shouldn’t pressure the appraiser for an inflated appraisal, in order to boost the tax deduction.
If the charity sells the real estate within two years, which usually will be the case, Form 8282 will be filed with the IRS. If there is a significant discrepancy between the sale price on this form and the valuation claimed for tax purposes, the IRS may question your deduction.
Further tax problems may result if you donate mortgaged property. The transaction will be treated as a bargain sale, reducing the tax deduction. Donating real estate that has been depreciated also may reduce the amount that you can deduct. The simplest approach, then, is to donate non-depreciated property that you own free and clear.
