I have a fountain pen collection, hundreds of pens, with a value in 5 figures. I now want to get rid of most of them. I have (nearly) decided that I don’t want to go through the hassle and anxiety of selling them one at a time, nor do I want to sell them en bloc to some dealer at less than half their value and let them make all the profit. So I am seriously considering donating them to a charitable organization, one which will know how to dispose of the pens to best advantage to them, and one with credentials that will allow me to deduct the donation from my taxes.
My question: shipping that many pens, many of them with boxes (some of the boxes being large), and insuring them for their full value, could end up costing me hundreds of dollars. Can I legitimately include that expense as part of my charitable contribution?
I understand that I am the one, not the charity, that will determine how much I claim for the pens, and I am prepared to back up legitimate values with evidence if so required*. I also realize that I could probably pad those values by a few dollars each to make up for the shipping and insurance, but I would rather be straightforward about it, and not finagle.
*Advice also appreciated about determining market value compared to the amount claimed, i.e. is it normal to claim full market value, or some percentage of that, assuming that the contribution amount would be audited.
I know that with vehicles, if the charity uses the vehicle, you can deduct fair market value of what it’s worth; however, if it’s an old clunker that they sell for scrap you can only deduct what they were paid for it. If they get $100 from a scrapper, hey, that’s $100 more than they had if you didn’t donate to them so it’s a win for them; the donator, OTOH only ends up with $25-30 (depending upon your tax bracket) next April; hardly seems worth it to me.
I can only assume it would be the same for your collection, that if they sell it for some low ball offer to a dealer, which is much easier for them then neither you nor the charity would get their full value.
Note that charitable deductions are only available if you itemize (state returns YMMV). At a “value in 5 figures”, this may be enough to itemize (over $15,750 if single to $31,500 MFJ), so also start gathering any other itemized deductions, such as mortgage, state and local taxes paid, medical only if substantial.
You can deduct costs associated with charitable donations, including shipping fees, travel, or vehicle expenses.
The fair market value is the one you should use, but you cannot deduct any appraisal fees. Check if your donee wants to cover this though.
Large non-cash donations need an extra Form 8283, which has a lot of instructions to look at.