What is Fair Market Value (FMV)?

Summary: Fair Market Value (FMV) is what your donated property would sell for on the open market. According to IRS Publication 561, it's the price a willing buyer and willing seller would agree on when both understand the facts. You generally determine FMV using thrift store prices, valuation guides, or qualified appraisals, depending on the asset and the documentation rules in IRS Publication 526.

Why FMV matters

According to IRS Publication 561, you must use fair market value to claim deductions for non-cash donations. The IRS defines FMV as "the price that property would sell for on the open market" between informed parties.

FMV is what a buyer would actually pay, not what you originally paid or what you think it's worth.

How to determine FMV

The method depends on what you donated:

For clothing, household items, and other personal property

Use comparable sales prices from thrift stores, online marketplaces, or valuation guides.

According to IRS Publication 526, donated items must be in good used condition or better to claim a deduction. "Good" means the item is usable with minor wear.

Where to find values: - Charity Record's built-in FMV guide (search while adding items). The 2025 values were sourced from Intuit ItsDeductible before it was shutdown. - Thrift store prices (Goodwill, Salvation Army) - Online marketplaces (eBay sold listings, Facebook Marketplace) - Salvation Army Valuation Guide

Example: - You donate a men's wool coat in good condition - Similar coats sell at Goodwill for $15-25 - Reasonable FMV: $20

For vehicles

Use the actual sale price if the charity sold it, or market value if they kept it for their own use.

According to IRS Publication 526: - If the charity sells the vehicle: Your deduction is limited to the sale price (shown on Form 1098-C) - If the charity keeps/improves the vehicle: You can use fair market value from pricing guides

Where to find values: - Form 1098-C from the charity (shows actual sale price) - Kelley Blue Book (for private party sales) - NADA Guides - Recent comparable sales in your area

For stock and securities

For publicly traded stock: Use the average of high and low trading prices on the donation date.

According to IRS Publication 561, for publicly traded securities, the most common method is the average of the high and low trading prices on the date of donation.

Where to find it: - Your broker's charitable contribution statement - Yahoo Finance (historical prices) - Google Finance (historical data)

For private/non-traded stock: You generally need a qualified appraisal if the claimed value exceeds $5,000. IRS Publication 561 notes that private company stock, RSUs from pre-IPO companies, and closely-held securities have no public market price, so professional valuation is required.

See our stock cost basis guide for more details on donating stock.

For art, collectibles, and jewelry

Get a qualified appraisal if the claimed value exceeds $5,000.

According to IRS Publication 561, art and collectibles valued over $5,000 generally require: - A qualified appraisal from a qualified appraiser - Form 8283 Section B - For art over $20,000: Attach an 8×10 photo to your tax return

For items under $5,000, you can use recent comparable sales (auction results, dealer prices, online marketplaces). Given the complexity of valuing art and collectibles, consider consulting an appraiser even for lower-value items.

For digital assets (cryptocurrency)

Use the fair market value in U.S. dollars on the donation date.

According to IRS Virtual Currency FAQs, cryptocurrency is treated as property. Use the exchange rate from a reputable cryptocurrency exchange at the time of donation.

Where to find it: - The exchange where you held the crypto (Coinbase, Binance, etc.) - Your broker's donation confirmation - Historical price data from CoinMarketCap or similar

Documentation requirements

Once you've determined FMV, you need to know what forms and receipts the IRS requires. According to IRS Publication 526 and the Form 8283 instructions, the key thresholds are:

• $250+: Written acknowledgment from charity
• $500+: Form 8283 Section A
• $5,000+: Qualified appraisal + Form 8283 Section B

Form 8283: Required for noncash donations over $500

According to Form 8283 instructions, if your total noncash donations exceed $500 for the year, you generally need to complete Form 8283 Section A. This applies to all noncash donations combined – if you donated $200 in clothes and $350 in furniture, that's $550 total.

What Form 8283 Section A typically requires: - Description of donated property, date acquired, your cost basis - Fair market value and how you determined it - Date of donation

Charity Record tracks this – when you export for tax time, we include data you need for Form 8283.

For items over $5,000, you'll generally need a qualified appraisal and Form 8283 Section B. See our Form 8283 guide for complete details on appraisal requirements.

Receipts and acknowledgments

Receipt requirements depend on donation amounts and are separate from FMV valuation. According to Publication 526: - Donations under $250: Keep your own records (bank statement, receipt) - Donations $250+: Generally need written acknowledgment from charity

See our receipt requirements guide for details on what documentation you need and what acknowledgments should include.

⚠️ Watch out for these less common situations

Most people can determine FMV using the methods above and move on. But a few scenarios add complexity:

• Making large donations? IRS Publication 526 explains that deduction limits depend on the property and the charity. Capital gain property is usually capped at 30% of your adjusted gross income, while cash gifts to public charities can go up to 60%. If you exceed the limit, you can generally carry forward the excess for 5 years.
• Donating multiple similar items? IRS Publication 561 aggregates "similar items" donated to the same charity. Example: 10 similar paintings totaling $6,000 count as one donation over $5,000 (appraisal required).
• Getting an appraisal? Not all appraisers meet IRS standards. The appraiser needs specific credentials and can't be connected to you or the charity.
• Worried about overvaluing? Publication 561 details valuation penalties: the IRS can impose a 20% penalty for significant overvaluations and 40% for gross misstatements.

If any of these apply to you, consider consulting a tax professional before filing.

Quick reference

How to determine FMV by donation type

Documentation thresholds

Need more help?

IRS Resources: - IRS Publication 561 - Determining the Value of Donated Property - IRS Publication 526 - Charitable Contributions

In Charity Record: - Use the FMV search when adding item donations for instant value suggestions - Our forms capture the data points the IRS requests on Form 8283; keep supporting documents like appraisals, receipts, or photos with your records - See our Form 8283 guide for items requiring appraisals

Charity Record is a donation tracking tool, not a tax advisor. This article summarizes publicly available IRS guidance to help you use our software. You are responsible for ensuring your tax filings comply with IRS requirements. For complex valuations or items over $5,000, consult a tax professional or qualified appraiser for advice specific to your situation.