Donated Minerals: Appraisals, Form 8283, and Reporting

The donor's side: qualified appraisal and Form 8283

Noncash gifts over $5,000 require the donor to obtain a qualified appraisal from a qualified appraiser and to file Form 8283, Section B, with the appraiser's signature — and the institution's acknowledgment signature. Mineral interests are squarely in this regime: there is no public market price to substitute, so the appraisal is the deduction's foundation. The appraisal must be timely (generally no earlier than 60 days before the gift, completed by the return's due date), and the appraiser must have demonstrable mineral competence — a credential examiners do check. Institutions cannot provide the appraisal, but they serve donors well by explaining the requirement early, before December compresses everyone's calendar.

What the institution's 8283 signature does and doesn't mean

The donee signature on Form 8283 acknowledges receipt of the described property — it does not vouch for the appraised value, a distinction worth stating internally because development officers sometimes hesitate to sign and controllers sometimes over-read what was signed. The institution should verify the property description matches what was actually conveyed (the recorded instrument, not the cover letter) before signing, keep a copy with the gift file, and pair it with the standard contemporaneous written acknowledgment the donor needs for any gift — describing the property received, without stating a value, and noting whether any goods or services were provided in return.

Form 8282: the three-year sale trigger

If the institution sells or otherwise disposes of the donated minerals within three years, it must file Form 8282 within 125 days of disposition, reporting the sale proceeds — with a copy to the donor. A sale price far below the appraised deduction invites IRS attention to the donor's return, which is why an intent to sell immediately belongs in the gift conversation up front, not as a post-closing surprise. The 8282 obligation is also a quiet argument for competent stewardship analysis: an institution that can credibly hold producing royalties is never forced into a fast, deduction-embarrassing sale.

The institution's books: recording and Form 990

On acceptance, the gift enters the institution's records at fair value with the basis documented — the donor's appraisal is commonly the starting evidence, refreshed by the institution's own valuation cycle thereafter. On Form 990, noncash contributions surface on Schedule M (with mineral gifts typically among "other" noncash categories) and the holding's income flows through the return's investment income reporting, with any working-interest income raising the UBIT and 990-T questions covered in our companion guide. Auditors will ask for the valuation basis and the income records; the gift file built at intake is what answers them.

The gift file, assembled once

A complete mineral gift file holds: the recorded conveyance and the donor's supporting documents (prior deeds, division orders, stubs), the qualified appraisal and signed 8283 copy, the contemporaneous acknowledgment, the intake record (operator notifications, division orders executed, suspense recovered), the initial valuation with stated basis, the UBIT classification, and any 8282 filed later. Built once at intake — the sequence our complete gifts guide details — the file serves the auditor, the 990 preparer, the committee, and the donor's advisor without anyone reconstructing anything.

Where institutions stumble

The recurring failures are procedural, not conceptual: December gifts accepted without explaining the appraisal requirement, leaving donors scrambling at filing time; 8283s signed against descriptions that do not match the recorded conveyance; dispositions inside three years with no 8282 because nobody connected the sale to the gift date; and gift files that contain a deed and nothing else, making every later question — auditor, donor, committee — an archaeology project. Each failure is prevented by the same thing: a standing intake routine run by hands that do it monthly, which is exactly what Valor provides institutions as part of its university and nonprofit service.