IRS Issues New Rules on Uniform Standards of Professional Appraisal Practice

IRS Issues New Rules on Uniform Standards of Professional Appraisal Practice
Posted on July 28th, 2023

Charities do great work and are always soliciting donations to keep the doors open. During the economic downturns of the last 50 years, charities have gone from bust to flush and back to broke again. So, they have gotten more creative—today you can donate artwork, stocks and bonds, vehicles, and more! Ever wondered what happens if you decide to donate to a charity and how it is valued?

In August 2018, the Internal Revenue Service (IRS) issued a new rule that governs how cash and noncash charitable contributions should be valued. The new rule specifically cites the Uniform Standards of Professional Appraisal Practice (USPAP) of The Appraisal Foundation.

Effective today, the new rule, entitled Substantiation and Reporting Requirements for Cash and Noncash Charitable Contribution Deductions, draws specific parameters around the term qualified appraisal. As stated in Section III (B) of the rule, appraisals are to be performed by a qualified appraiser according to the “substance and principles of the Uniform Standards of Professional Appraisal Practice [USPAP] as developed by the Appraisal Standards Board of the Appraisal Foundation.” This clarification pertains to charitable contributions of ALL property types.

For nearly 30 years, USPAP has become deeply embedded in our legal and regulatory systems. This ruling by the IRS only underscores its importance and relevance to all valuation issues. USPAP has been widely embraced in numerous landmark court cases in all disciplines of valuation. USPAP-compliant Appraisers are extraordinarily important to donors, charities, financial planners of high-net-worth individuals (HNWI), and more. USPAP was adopted by Congress in 1989 and contains standards for all types of appraisal services, including real estate, personal property, business, and mass appraisals.

Consumers wishing to make charitable contributions of property for tax deduction purposes will want to ensure that property appraisals for items worth $5,000 or more are performed by a qualified professional in accordance with USPAP.

Maple Leaf Appraisals and exist in the rarefied air as one of the few liquidation platforms that has a USPAP and IRS-compliant Appraiser on staff. This is not an easy task. To be USPAP and IRS compliant requires great skill and determination to maintain continuing education, be recertified every two years, and exhibit an unparalleled commitment to the law and exactness. USPAP gives Appraisers the tools they need to execute and deliver fair and unbiased opinions of values.

Remember, An ounce of prevention is worth a pound of cure! Be sure to ask any liquidation or auction company if they handle appraisals. Be sure to ask for their credentials. The best Appraisers will have their credentials on their website and be easily accessible. Anyone can place an icon on their website and claim to be an Appraiser. Do your homework and your due diligence.

Maple Leaf Appraisals and can handle all your liquidation and appraisal needs quickly and efficiently. Our proven track record and longevity in business speak volumes. Our referral rate is second to none, and very few in our industry maintain the credentials and knowledge we have accumulated to service all your needs. Give us a call or email us today to see how we may be of assistance.

Uncover Your Valuable Assets

Reach out to Maple Leaf Appraisals for accurate and reliable appraisals. Our experts will help you discover the true potential of your assets. Let our precision be your peace of mind!