Deducting Non-Cash Contributions
Editor's Note: This article is part of our 2014 Tax Tips series. Robert Flach is an expert with more than 40 years of experience as a tax professional and also blogs as The Wandering Tax Pro.
NEW YORK (MainStreet) Did you finally clean out your attic, basement, closet, or garage last year and donate your unwanted "stuff" to Goodwill, the Salvation Army or your church rummage sale? You deduct the "fair market value" of used clothes, books, household items, toys, furniture, etc. donated to a church or charity as a Contribution on Schedule A.
You must determine the fair market value of the items donated. The charity is not required to, and in most cases will not, provide you with a value. There are several online valuation guides you can use. Click here and here.
If the total of all your "non-cash" contributions for the year is more than $500.00 you must fill out IRS Form 8283 and provide the following information -
- the name and address of the charity,
- the date you made the contribution,
- the fair market value of the items donated, and
- how you determined the value for example "estimate" or "Salvation Army valuation guide"
If any one item has a value of more than $500.00 you must also list -
- the date you acquired the item,
- how you acquired the item by purchase, gift, or inheritance, and
- the cost or adjusted basis of the item.
If you donate an item that is worth more than $5,000 you must get and attach an appraisal. Special rules apply if you donate a vehicle.
You can only deduct the value of items that are in at least "good" condition. You cannot deduct items of minimal monetary value, such as used socks or underwear.
If you purchase new items to contribute to a food, toy or clothing drive you can deduct the actual cost.
--Written by Robert D. Flach for MainStreet