When an item of jewelry is being donated to any charitable organization, an appraisal may be required. The value to be used for tax reporting is most commonly the fair market value. This is defined as the price that a willing buyer and willing seller would agree upon.
An example of fair market value might be the price that an item sells for at a local auction. Rarely is this price a full retail price. Depending on the condition of the item and the desirability of the item, the fair market value might be as low as “scrap” value or rarely, as high as retail value.
If planning a donation or estate contact the IRS via their website www.irs.gov for more information regarding appraisal expectations.