Note strict appraisal rules when donating facade easements.(Brief article)

Kiplinger Tax Letter, The, October, 2007

Note the strict appraisal rules when donating facade easements.

The decrease in the property's value must be documented, IRS says in a private ruling. Some taxpayers are trying to substantiate donations of facade easements by providing pre-easement valuations of a building and assuming a flat 10% to 15% reduction in value after the donation. That's because IRS' training manuals for agents once said such easements normally reduce the value of a property by 10% to 20%. Now, however, the Service wised up and expunged that language. So to be valid, appraisals must still analyze the specific facts of each donation. Agents will deny deductions when they spot bare-bones valuations.