4.1.5 Basic Quiz -- Valuation of Art

The value of an item for charitable deduction purposes is determined by what the donor thinks the property is worth.

True False

The IRS frequently audits donors to see if they have overvalued gifts of art made to charity.

True False

If the Service determines that a donor has overstated a charitable deduction, it can impose a 20% penalty, which is the maximum penalty allowed by law.

True False

To ensure a correct and proper valuation, an appraisal must be made at the time of the gift.

True False

If an appraisal is required, the appraiser and the charitable donee must sign Form 8283.

True False

Any gift of artwork where the donor claims a deduction of $5,000 or more must be supported with a qualified appraisal.

True False

In order to qualify for a charitable tax deduction, it may be necessary for the donor to submit a photo or color transparency of the artwork with the appraisal.

True False

If a donor gives a fractional undivided interest in a piece of art, his or her charitable deduction may be reduced for lack of marketability and control.

True False

A donor must file Form 8282 if the contributed property is subsequently sold by the charity.

True False

When computing the charitable deduction for a tangible personal property gift into a CRT, the Applicable Federal Rate (AFR) for the contribution month or the prior two months must always be used.