I recently gave a couple of boxes of books to a local group that is having a rummage sale, proceeds to benefit the tsunami victims. Now, as I understand it, I’m entitled to deduct the fair market value of the books from my income as a charitable contribution on my taxes.
I have no knowledge or control over how the books will be priced or sold by the group running the sale. I just have a receipt listing the books I gave them. But if I go to, for instance, alibris.com or eBay, some of the books are worth quite a bit of money in the secondhand market.
Conceivably, I (or the group) could go to the trouble of selling the books online. Does that allow me to claim the alibris.com price (minus fees) as “fair market value”? Realistically, the books will probably go for 50 cents apiece (although I don’t know what the group is really going to do with them).
Let’s say a particular book is listed for $30 online but actually gets sold for 50 cents at the rummage sale. One could argue that the actual selling price of the book defines its fair market value, so the value should be 50 cents. But it’s possible that someone who has really been looking for the book happens upon it at the rummage sale and would have paid up to $30 for it, but gets it for a steal at 50 cents. Isn’t the fair market value still $30? Or is the fair market value contingent on how the item is sold? Does it make a difference that I personally do not control how the books are sold (the rummage sale group could indeed sell the books online - I have no interest in stopping them from doing so.)
IANATA (tax attorney) but I had a similar situation when I donated my old car to charity last year. I was allowed to deduct the fair market value of the car, which I determined using the Kelley Blue Book. I might have been able to sell it for more, I might have been able to sell it for less but the KBB is a good middle ground and if the IRS had asked me to justify the deduction value I would have showed them how I calculated it.
(The vehicle donations laws just changed this year so now you can only deduct the actual selling price of the car)
I’d say that you should do the same thing with your books - do a bit of research with online guides or “used book pricing tables” (if there is such a thing) and claim a reasonable value. Keep the tables or whatever you used to get your deduction values and if the IRS questions you about it, be prepared to show how you came up with your prices.
Ballpark figure, how much of a deduction are you looking at? If you are worried about the difference between $50 and 50 cents I can’t imagine that’s going to raise red flags over at the IRS. OTOH if you are claiming that you donated $10,000 worth of rare editions then you’d better be prepared to show exactly how you arrived at that figure.
IANA tax speialist, but I’ve heard you have to give to an institution recognozed by the IRS to claim a tax deduction on your donation. The institution you give to then gives you a receipt that you can use to value your contribution for tax purposes.
From your general description, this sounds like an adhoc group of people who got together and did a good thing which you contributed to. That does not automatically make it a tax deductible contribution.