Real Property Appraisals vs. Personal Property Appraisals
For clients to receive a tax deduction for deconstruction, all IRS guidelines need to be followed appropriately. There are several IRS cases brought to court that taxpayers have lost out on their valuable deductions because they did not have the correct appraisal documents. Green Donation Consultants follows all IRS guidelines, including providing our clients with a qualified appraisal document. One common mistake clients make equating a real estate appraisal with a personal property appraisal. Beware! They are very different documents!
You Can’t Use a Real Property Appraisal for Deconstruction.
Real estate property appraisals are never an appropriate document when it comes to deconstruction. Deconstruction requires a personal property appraisal, which breaks a piece of real property down to its parts, lumber, appliances, etc.
Depreciation Value Differs in Deconstruction
Deconstruction value is derived from fair market value, looking at comparable sales in the specific geographical market within the timeframe. Real estate value will differ significantly from deconstruction value, simply in how it is calculated. Furthermore, the IRS will not accept a real estate appraisal for your deconstruction deduction.
What Happens If You Provide the IRS the Incorrect Appraisal Document?
If you go ahead and try to use a real estate appraisal instead of a qualified personal property appraisal, there are consequences. The IRS will disallow your non-monetary charitable tax deduction. If you underpay, you could be subject to significant tax penalties. This is why it is crucial you find an appraiser who understands deconstruction and precisely what the IRS requires.
Find a Qualified Appraiser Who Understands Deconstruction
Green Donation Consultants is unique in that deconstruction is our bread and butter. We have one of the largest teams of qualified appraisers in the nation. We fully understand all the required IRS standards to ensure our clients receive their charitable contribution deduction and avoid the pitfalls of inaccurate valuations.