Which factor would not affect the fair market value of an external in-kind contribution?

Which factor would not affect the fair market value of an external in-kind contribution?

• A. Donor identity
• B. The appraised value of the item
• C. The item’s condition
• D. The date of donation

Answer: (A)

The main point is that fair market value for an external in-kind contribution is determined by the item itself and the market conditions at the time of donation, not by who donated it. FMV reflects what the item would reasonably sell for in an open market on the donation date, so factors like the item's appraised value, its condition, and when it was donated all shape that value. The donor’s identity does not alter the price the item would fetch; a different donor would not change the market-worth of the asset. For example, an item with a clear appraisal or a price based on comparable sales will have a specific value on the donation date. If the item is in excellent condition, it will command a higher FMV than if it’s worn or damaged. If the donation date is later and market prices have shifted, the FMV can change accordingly. The donor’s name or identity has no bearing on these factors.

The main point is that fair market value for an external in-kind contribution is determined by the item itself and the market conditions at the time of donation, not by who donated it. FMV reflects what the item would reasonably sell for in an open market on the donation date, so factors like the item's appraised value, its condition, and when it was donated all shape that value. The donor’s identity does not alter the price the item would fetch; a different donor would not change the market-worth of the asset.

For example, an item with a clear appraisal or a price based on comparable sales will have a specific value on the donation date. If the item is in excellent condition, it will command a higher FMV than if it’s worn or damaged. If the donation date is later and market prices have shifted, the FMV can change accordingly. The donor’s name or identity has no bearing on these factors.