The IRS requires that the appraisal value actually correlates with what was donated (surprise), the IRS also requires that the materials be in good, re-usable condition.
First of all, items which are removed from a structure and donated are considered a donation of PERSONAL PROPERTY. This is important because some appraisers will use real property comparables from a neighborhood, subtract the land and viola - your value. Not going to fly. MOST appraisers who do these appraisals use a single method for the valuation of a house full of items, Marshall & Swift or a similar cost approach replacement software. This depends on square footage and how ethical the appraiser is. The software is easily manipulated and can change $100,000 in value with a few clicks. However, it is widely used and recognized by the IRS.
No the IRS does not certify appraisers, they can prohibit them however. They do recommend however that you use a licensed, certified appraiser, competent in the appraisal of building materials. From IRS Publication 561:
Qualified Appraiser. A qualified appraiser is an individual who meets all the following requirements
In addition, the appraiser must complete Form 8283, Section B, Part III. More than one appraiser may appraise the property, provided that each complies with the requirements, including signing the qualified appraisal and Form 8283, Section B, Part III.
I (Molly Samietz) am a licensed, certified General Appraiser by the state of California. This designation is the highest available. Most states have a license look-up online, letting you know the status of the appraiser. Look in the state the appraiser is based in.
We appraise building materials (any materials used in construction or finishing of commercial or residential buildings, new and vintage items). In addition, we appraise soft goods such as window coverings. Items such as furniture and artwork are appraised on a limited basis, if the item is believed to have a value in excess of $5,000, we will make a determination as to whether we will appraise it or recommend an appraiser who specializes in the specific item. Miscellaneous household goods and soft goods are appraised on a bulk basis estimated by box or bag (dishes, office supplies, light bulbs, clothing, bedding, etc.).
We recommend using a licensed deconstruction contractor, however, many contractors are definitely competent to remove and deliver the items as well as many homeowners.
Lumber needs to be de-nailed and at least 6 feet in length for framing lumber, smaller lengths are acceptable for flooring and siding. Lumber should be banded and palletized if possible. Bricks should be cleaned and palletized. Items should be kept as complete as possible. Think ease of re-use. In general - a vanity donated with a sink, faucet and countertop in place is preferable to a vanity, a sink and a faucet (many countertops do not survive removal). Doors when possible should be kept with hinges, doorknobs and doorframe.
The donee has final say over what is accepted in a donation. Whether you, your contractor, deconstruction contractor or an inspector creates an initial list - it should be approved by the donee before deconstruction starts and it MUST be signed off by them as well as dated before we can finish your paperwork.
The donor selects the donee. While we list the most commonly used building materials donees here, we have worked with a multitude of non-profits who have accepted donations of building materials. We strongly suggest checking with your accountant regarding a donee you may be considering who is not listed here.
It matters who you donate to. A 501c3 that operates a resale store, or as part of their mission gives building materials to needy homeowners or uses the building material in the repair or building of new homes is the preferred donee for building material donations. In addition, a 501c3 such as a church or retreat center that uses the donation and does not resell the items is a great donee.
If the items are donated to a non-profit that does not normally deal with building materials and they do not keep them for their own use but sells them - then what they sell them for becomes market value for the items. If the house is donated to the fire department for training, only expenses incurred in the specific use by the fire department are deductible.
Now if the items are donated to a for-profit company that partners with a non-profit company, they need to file stating how much they received as a donation from the donor. Typically, 10% of the sale of the items is what is donated to the actual non-profit. Picture the IRS coming back later and adjusting your “market” value appraisal to reflect the actual amount the non-profit received.
So - it does matter who you donate to. Always check with your accountant regarding the usability of any donee.