KO Appraisal
Guide

Charitable Donation Appraisal for California Real Property

If you donate real property to charity and claim a deduction over $5,000, IRC § 170(f)(11)(C) requires a qualified appraisal prepared by a qualified appraiser, and Form 8283 Section B must be filed with your return. Above $500,000, the appraisal itself must be attached. The requirements in Treas. Reg. §§ 1.170A-16 and 1.170A-17 are technical and the courts enforce them strictly. A deduction can be disallowed in full for a defect in the substantiation even where the value claimed was not too high, as it was in Mohamed v. Commissioner, T.C. Memo. 2012-152.

The thresholds, and what triggers them

The rules key off the claimed deduction, and IRC § 170(f)(11)(F) directs that property and all similar items of property donated to one or more donees be treated as one property for threshold purposes, so the test is the aggregate, not the value of any single parcel considered in isolation.

  • $250 or more, any single contribution: a contemporaneous written acknowledgment from the charity is separately required under IRC § 170(f)(8). The appraisal does not substitute for it
  • Over $500: Form 8283 must be filed with the return by individuals, partnerships, S corporations, and personal service or closely held C corporations. IRC § 170(f)(11)(B) expressly excepts a C corporation that is neither a personal service corporation nor a closely held C corporation from this requirement
  • Over $5,000: a qualified appraisal is required and Form 8283 Section B must be completed, including the appraiser's declaration and the donee organization's acknowledgment of receipt (IRC § 170(f)(11)(C))
  • Over $500,000: the qualified appraisal itself must be attached to the return (IRC § 170(f)(11)(D))

What makes an appraisal "qualified", and an appraiser "qualified"

Treas. Reg. § 1.170A-17(a) sets the content and timing requirements. Under § 1.170A-17(a)(2) the report must be prepared in accordance with generally accepted appraisal standards, which the regulation ties to the substance and principles of the Uniform Standards of Professional Appraisal Practice. Section 1.170A-17(a)(3) lists the required elements, including a description of the property, its condition, the valuation effective date, the fair market value, the appraiser's qualifications, the method and basis of valuation, and the prescribed declaration. Section 1.170A-17(a)(4) requires the report to be signed and dated no earlier than 60 days before the date of the contribution and no later than the due date, including extensions, of the return on which the deduction is first claimed, or, where the deduction is first claimed on an amended return, the date that return is filed. Section 1.170A-17(a)(5) adds that where the report is dated before the contribution, the valuation effective date must fall no earlier than 60 days before the contribution and no later than the contribution date. The 60-day rule catches people who commissioned an appraisal months in advance for planning purposes and then tried to use it for the return.

The qualified appraiser test is narrower than most people expect. Treas. Reg. § 1.170A-17(b)(1) requires verifiable education and experience in valuing the type of property. Section 1.170A-17(b)(2) supplies the only two ways to meet it: professional or college-level coursework in valuing that type of property plus two or more years of experience in valuing it, or a recognized appraiser designation for that type of property. Section 1.170A-17(b)(3) defines the type of property as the category customary in the appraisal field for an appraiser to value, and § 1.170A-17(b)(4) makes the showing "verifiable" only if the appraiser specifies that education and experience in the appraisal itself and declares that he is qualified because of it. There is no state licensing test in this regulation. The words "licensed," "certified" and "State" do not appear in § 1.170A-17 at all. Credentialing is nonetheless administered state by state as a matter of state law, and there is no national appraisal license; the Appraisal Subcommittee maintains a national registry of state-issued credentials rather than issuing its own. My California Certified General credential, certificate #3005065, is issued by the California Bureau of Real Estate Appraisers under Cal. Bus. & Prof. Code § 11300 et seq., and is listed on the ASC National Registry. I hold the MAI and SRA designations. I accept California property only.

Section 1.170A-17(b)(5) then disqualifies six categories of individuals outright: anyone receiving a fee prohibited by § 1.170A-17(a)(9); the donor; a party to the transaction in which the donor acquired the property, unless the property is contributed within two months of the date of acquisition and the appraised value does not exceed the acquisition price; the donee; persons related to or employed by any of the foregoing, and independent contractors regularly used by them who do not perform a majority of their appraisals for others; and anyone barred from practice before the IRS under 31 U.S.C. 330(c).

The fee rule sits in § 1.170A-17(a)(9), not in the qualified-appraiser paragraph: the fee for a qualified appraisal cannot be based to any extent on the appraised value, and the regulation treats a fee as based on appraised value if any part of it depends on the amount of value the Internal Revenue Service allows after an examination. Section 1.170A-17(b)(5)(i) then makes an appraiser who accepts such a fee a non-qualified appraiser, which is what actually destroys the deduction.

Structures that change the number

Not every charitable real property gift is an outright transfer of the entire fee, and the deduction is not always fair market value.

In a bargain sale, the property is sold to the charity below market and the excess of value over price is the contribution. Basis is allocated between the sale and gift portions under IRC § 1011(b) and Treas. Reg. § 1.1011-2, so the appraised value drives both the deduction and the gain recognized on the sale portion.

Under IRC § 170(e)(1)(A), the deduction is reduced by the gain that would not have been long-term capital gain, which means property held a year or less, or real property held as dealer inventory, is deductible only up to basis. Contributions of partial interests are generally disallowed under IRC § 170(f)(3), with statutory exceptions including a remainder interest in a personal residence or farm, an undivided portion of the donor's entire interest, and a qualified conservation contribution.

Deduction limits do not change the appraisal, but they change what the appraisal is worth to you. Long-term capital gain real property given to a public charity is generally subject to a 30 percent of contribution base limit under IRC § 170(b)(1)(C), with a five-year carryforward and an election to use the 50 percent limit by reducing the contribution to basis. Two newer rules matter for returns filed for 2026 and later: IRC § 170(b)(1)(I), added by P.L. 119-21 in July 2025, allows an individual itemizer's charitable contributions only to the extent they exceed 0.5 percent of contribution base for the year, applying that floor to capital gain property before other categories under its ordering rules; and the rewritten IRC § 68 caps the benefit of itemized deductions by reducing them by 2/37 of the lesser of total itemized deductions or taxable income above the 37 percent bracket threshold. Both apply to taxable years beginning after December 31, 2025. Your CPA runs those numbers.

Why appraisers are conservative on these

IRC § 6695A imposes a penalty directly on the appraiser for a valuation that produces a substantial or gross valuation misstatement. The greater of $1,000 or 10 percent of the resulting tax underpayment, but capped by IRC § 6695A(b)(2) at 125 percent of the gross income received from preparing the appraisal, and not imposed at all where the appraiser establishes under § 6695A(c) that the value was more likely than not correct. For income tax purposes IRC § 6662(e) treats a claimed value of 150 percent or more of the correct value as a substantial misstatement, and § 6662(h) treats 200 percent or more as gross.

A donor should be suspicious of any appraiser who quotes a value before doing the work, or whose fee moves with the outcome. That arrangement is not merely bad practice, it is the disqualifying fee under § 1.170A-17(a)(9). The IRS publishes guidance on valuing donated property in Publication 561, and noncash contribution substantiation is a recurring subject of IRS examination and Tax Court litigation.

Standard turnaround is one to three weeks. Deposition and expert witness testimony are available. Residential (760) 685-8036, [email protected]; commercial (619) 704-7070, [email protected]. Office at 600 W Broadway, San Diego, CA 92101.

Common questions

Can the charity provide the appraisal, or recommend the appraiser?
The donee organization cannot serve as the qualified appraiser. Treas. Reg. § 1.170A-17(b)(5) excludes the donee, the donor, anyone receiving a prohibited fee, a party to the transaction in which the donor acquired the property, unless the property is contributed within two months of acquisition and the appraised value does not exceed the acquisition price. Persons related to or employed by those parties, independent contractors regularly used by them who do not perform a majority of their appraisals for others, and anyone barred from practice before the IRS. A charity can give you names, and many maintain lists, but the engagement, the fee, and the independence have to be yours. The charity's separate obligation is to sign the donee acknowledgment in Section B of Form 8283, which is not an endorsement of the value.
My appraisal is from last year. Can I still use it?
It depends on when the gift was made, not on how long ago the report was written. Under Treas. Reg. § 1.170A-17(a)(4) the appraisal must be signed and dated no earlier than 60 days before the date of the contribution and no later than the due date, including extensions, of the return on which the deduction is first claimed, or, for a deduction first claimed on an amended return, the date that return is filed. If the gift was also last year and the report was signed inside that window, it is timely. What fails is the appraisal commissioned well ahead of the gift for planning purposes: signed more than 60 days before the contribution, it falls outside the window even though the value may still be accurate. Where the report predates the gift, § 1.170A-17(a)(5) separately requires the valuation effective date to fall between 60 days before the contribution and the contribution date.
Does the appraiser have to hold a credential in the state where the property is located?
Not as a matter of Treas. Reg. § 1.170A-17, which contains no state licensing test, the qualified appraiser standard in § 1.170A-17(b)(2) is coursework plus two or more years of experience in valuing that type of property, or a recognized appraiser designation for it. In practice it still matters. Appraiser credentials are issued state by state and there is no national appraisal license, state law governs who may practice in that state, and USPAP's Competency Rule requires the knowledge and experience the specific assignment demands. An out-of-state appraiser with no local market experience is exactly the profile that loses a type-of-property argument on examination. I hold California Certified General certificate #3005065 from the California Bureau of Real Estate Appraisers and am listed on the ASC National Registry, and I accept California property only.
What happens if the appraisal is defective?
The deduction can be disallowed entirely, regardless of the merits of the value. That is what happened in Mohamed v. Commissioner, T.C. Memo. 2012-152. IRC § 170(f)(11)(A)(ii)(II) provides a reasonable cause exception, and the Tax Court has accepted substantial compliance in some cases, beginning with Bond v. Commissioner, 100 T.C. 32 (1993), but both are litigating positions rather than plans. Missing an appraisal altogether where one is required, or attaching one signed by someone who does not meet the qualified appraiser definition, are the failures that most often cost the entire deduction.
Does California allow the same deduction?
California allows an itemized charitable deduction that generally tracks IRC § 170 under Cal. Rev. & Tax. Code § 17201, but California conforms to the Internal Revenue Code as of a fixed specified date under R&TC § 17024.5 rather than automatically. That specified date precedes the July 2025 federal legislation, so California does not pick up the new 0.5 percent floor at IRC § 170(b)(1)(I) or the rewritten § 68 limitation, and the state's percentage limitation and carryover rules do not always match the federal ones. California has also offered a state-level credit for certain real property gifts, the Natural Heritage Preservation Tax Credit, 55 percent of fair market value for contributions approved by the Wildlife Conservation Board (R&TC § 17053.30, FTB Form 3503), but by the statute's own terms it reaches qualified contributions made no later than June 30, 2026, so absent new legislation it is closed to later gifts, though existing carryovers survive. Confirm the California treatment with your CPA. The qualified appraisal requirement itself is federal and is what governs the appraisal.
Who wrote this Kevin O'Brien, MAI, SRA. California Certified General Real Estate Appraiser #3005065, issued by the California Bureau of Real Estate Appraisers (BREA). Practicing in San Diego. This page reflects how these assignments are actually handled, not a summary of other people's summaries.
Where this applies Appraiser licensing is state-specific, there is no national appraisal licence, so appraisal engagements here are California properties, primarily San Diego County. The valuation methodology and the federal tax rules described above apply anywhere in the United States; if your property is in another state, you need an appraiser credentialed there, and this page should still tell you what to ask them for.

Sources

Every statutory and regulatory claim on this page traces to one of the following. Where a source could not be confirmed, the claim was removed rather than softened.

  1. IRC § 170(f)(8): contemporaneous written acknowledgment required for any contribution of $250 or more.
  2. IRC § 170(f)(11)(B): over-$500 description requirement, with an express exception for a C corporation that is neither a personal service corporation nor a closely held C corporation.
  3. IRC § 170(f)(11)(C): qualified appraisal required for property contributions over $5,000; § 170(f)(11)(D). The qualified appraisal must be attached to the return above $500,000; § 170(f)(11)(E). Definitions of qualified appraisal and qualified appraiser; § 170(f)(11)(F) . Property and all similar items donated to one or more donees treated as one property for the thresholds; § 170(f)(11)(A)(ii)(II). Reasonable cause and not willful neglect exception.
  4. IRC § 170(f)(3): partial interest contributions generally disallowed, with exceptions including a remainder interest in a personal residence or farm, an undivided portion of the donor's entire interest, and a qualified conservation contribution.
  5. IRC § 170(e)(1)(A): deduction reduced by the gain that would not have been long-term capital gain if the property were sold at fair market value.
  6. IRC § 170(b)(1)(C): 30 percent of contribution base limit for capital gain property given to a public charity, five-year carryforward, and the election to apply the 50 percent limit by reducing the contribution under § 170(e)(1).
  7. IRC § 170(b)(1)(I) (added by P.L. 119-21, July 4, 2025), individual itemizers' charitable contributions allowed only to the extent they exceed 0.5 percent of contribution base, with ordering rules applying the floor to capital gain property before other categories; effective for taxable years beginning after December 31, 2025.
  8. IRC § 68 (as amended by P.L. 119-21). Itemized deductions reduced by 2/37 of the lesser of total itemized deductions or taxable income above the 37 percent bracket threshold; effective for taxable years beginning after December 31, 2025.
  9. IRC § 1011(b) and Treas. Reg. § 1.1011-2. Bargain sales to charity; allocation of basis between the sale and gift portions.
  10. Treas. Reg. § 1.170A-16: substantiation requirements for noncash contributions by dollar threshold.
  11. Treas. Reg. § 1.170A-17(a)(2), generally accepted appraisal standards, tied to the substance and principles of USPAP; § 1.170A-17(a)(3). Required contents of the appraisal; § 1.170A-17(a)(4). Signing window running from 60 days before the contribution to the due date (with extensions) of the return first claiming the deduction, or the filing date of an amended return; § 1.170A-17(a)(5), valuation effective date; § 1.170A-17(a)(9), prohibited appraisal fee, including a fee any part of which depends on the value allowed by the IRS after examination.
  12. Treas. Reg. § 1.170A-17(b)(1)–(b)(4): qualified appraiser: verifiable education and experience shown by coursework in valuing the type of property plus two or more years of experience, or a recognized appraiser designation for that type of property, specified and declared in the appraisal. The section contains no state licensing or certification requirement. § 1.170A-17(b)(5), excluded individuals, including the two-month/acquisition- price exception at (b)(5)(iii) and the prohibited-fee disqualification at (b)(5)(i).
  13. IRC § 6662(e), (h): substantial valuation misstatement where claimed value is 150 percent or more of the correct value; gross valuation misstatement at 200 percent or more.
  14. IRC § 6695A: appraiser penalty; § 6695A(b)(2) caps it at 125 percent of the gross income received from preparing the appraisal; § 6695A(c) provides the more-likely-than-not exception.
  15. Mohamed v. Commissioner, T.C. Memo. 2012-152: deduction disallowed in full for failure to obtain a qualified appraisal, notwithstanding that the property was worth at least the amount claimed. Bond v. Commissioner, 100 T.C. 32 (1993), substantial compliance doctrine applied to the appraisal substantiation rules.
  16. IRS Form 8283, Noncash Charitable Contributions, and Instructions (rev. Dec. 2025); IRS Publication 561, Determining the Value of Donated Property.
  17. USPAP (2024 ed.), Standards 1 and 2 (real property appraisal development and reporting) and the Competency Rule.
  18. Cal. Bus. & Prof. Code § 11300 et seq. Real Estate Appraisers' Licensing and Certification Law, under which the California Bureau of Real Estate Appraisers issues the Certified General credential.
  19. Cal. Rev. & Tax. Code § 17024.5. California conforms to the Internal Revenue Code as of a fixed specified date, not on a rolling basis; § 17201, conformity for itemized deductions including IRC § 170.
  20. Cal. Rev. & Tax. Code § 17053.30. Natural Heritage Preservation Tax Credit, 55 percent of the fair market value of a qualified contribution approved by the Wildlife Conservation Board, allowed for contributions made no later than June 30, 2026 (last window opened January 1, 2021); FTB Form 3503.

Related reading

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