Sabrina estimates the value of her donation to be approximately $6,000. Sabrina recently learned that...
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Accounting
Sabrina estimates the value of her donation to be approximately $6,000. Sabrina recently learned that because her donation exceeds $5,000, she must support her donation with an appraisal and signed statement by the appraiser on Form 8283. Sabrina decides to claim a charitable deduction of $4,900 to avoid the appraisal requirement.
If Sabrina gets an appraisal that states the value of the clothes is $6,000, how much tax deduction will she receive for the clothes?
If Sabrinas clothes are worth $6,000, is she better off getting the appraisal or reporting a deduction of $4,900? What information would you need to answer this question?
Does Sabrinas reporting $4,900 violate tax law and/or ethical standards?
Do you think the IRS has reason to be suspicious of contributions that fall just below $5,000? Why?
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