The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, in my opinion represents the most consequential restructuring of the federal charitable deduction in a generation.
The valuation of materials and fixtures within real estate depends heavily on their attachment to the property versus their status as detached personal property.
Across the United States, donors are diverting tens of thousands of pounds of building materials, appliances, fixtures, furniture, and other commercial and residential content from landfills each week through donation to qualified 501(c)(3) charitable organizations.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, introduces significant changes to charitable contribution deductions that will directly impact donors of deconstructed building materials, household furnishings, and other tangible personal property beginning January 1, 2026.
After decades in federal tax policy and years in deconstruction, I’ve learned the vast tax code holds powerful solutions. Today, those tools are urgently needed to address critical challenges we all face.
The three parties to an appraisal MUST remain independent to ensure accuracy and validity of the deconstruction tax donation. We recently experienced an issue where these lines were blurred, and the taxpayer could have found themselves without a compliant appraisal.
The US Tax Court has delivered yet another loss of a non-cash charitable contribution, this time due to a technicality. In the latest case, Albrecht v. Commissioner, TC Memo 2022-531, a well-meaning donor lost the value of her entire charitable deduction for property donated to a museum due to a technicality in the written receipt provided by the museum.
It appears to be typical of any IRS codification or procedural direction, that the end result must be confusion. Obtaining clarification may involve hours of wait-time to speak to a real person or a head-first dive down the rabbit hole of reading scholarly articles on a CPA or tax attorney’s interpretation of said codification. When it comes to appraisers, they may inadvertently interpret IRS publications incorrectly and expose the client to risk for an audit and the subsequent loss of their non-monetary charitable contribution deduction due to failure to procure proper documentation.
The concept of “Related Use” continues to present an area of confusion, especially for nonprofits and relates directly to Tax Form 8282. Related-use is the stipulation that a nonprofit must utilize donations to further their defined mission.
For non-cash charitable contributions exceeding $5,000, the IRS requires completion of Form 8283 Section B by the taxpayer and certification by a qualified appraiser. Box F of this section specifically requires the donor to provide the original cost or adjusted basis of the donated property. This entry allows the IRS to evaluate whether the claimed charitable deduction is reasonable in comparison to the donor’s original investment.