A recent Tax Court ruling (RERI Holdings I, LLC v. Commissioner) highlights the urgency to ensure the that the cost basis of the property is entered on Form 8283 - Noncash Charitable Contributions. Failing to follow all of the requirements e.g. reporting the cost basis - even in cases where the fair market value is provided - could trigger a complete disallowance of the deduction.
How does the IRS treat the donation of a classic car, a piece of art, or even real estate if donors don't know or don't say what it was worth when they received it? The Internal Revenue Service can disallow the entire value of the donation if the donor leaves that amount blank on the form used to report such donations, according to a recent U.S. Tax Court decision.