So, the wife tells me she’s got a ton of stuff to take up to goodwill. Okay, so I load up the car with all the boxes and head up there. Upon getting there the guy that was going to help me tells me that there are “Caps.” I asked what the “Caps” are and he says “I think it’s about $500.” Okay, I showed him the list of stuff I had and asked him if he could give me a rough idea of what it’s worth and he said no. So I left the stuff in the car, and went back home.
I dug through the IRS website and didn’t see anything about a limit on what you could donate. Well, I take that back, I did see something about 50% of my AGI, but I don’t think I’m coming anywhere near that. I have about 200 clothing items.
Also, can someone tell me where I can figure out what each item’s value is for tax purposes?
Seems to depend on what you are donating. Here’s the IRS publication about donations and deductions (this is from 2006, I’m sure that they’ve got the 2007 form on their site but I didn’t see it so perhaps it hasn’t changed).
For example it looks like used clothing must be in good condition or better and you can only deduct what it would be sold for in a used clothing store (they say there are no hard and fast rules here). It also looks like you have to have a written appraisal for items that you claim are worth more than $500 (although I’m not sure if that includes a mass donation of stuff totalling $500+).
There’s a big section called “Limits On Deductions” as well.
First of all, the first part of zut’s cite re. $250 or more only refers to cash/check donations, so that doesn’t apply here.
The second part of the post, referring to Form 8283, will apply in your case. If you donate “stuff” totalling over $500, you will indeed need to file a form 8283 with your tax return. This form will ask you for more detail about the “stuff” such as what it cost you originally and on what you are basing your donated value (there are some standard answers to these questions that your tax pro can help you with). As one might guess, the IRS has a tendency to scrutinize just a little more closely the 8283’s, particularly if they’re excessive relative to your income levels.
Don’t get me wrong; if you actually made the donation, I say take the deduction (and note, this whole thing about deducting charitable donations only comes into play provided you are itemizing your deductions; if you’re not, you’re out of luck and get no benefit from the donation). Just keep detailed records of what you donated, the condition it’s in, and good estimates of where, when, and how much you paid for it originally (I know, I know, for most people these will be very general estimates).
Note also that it’s you the taxpayer that needs to place a value on the stuff; not the charity store, and not your tax preparer. You can best do this by obtaining and going off of pre-printed lists that many places like Goodwill often provide; you may even be able to find some standard lists online somewhere.
So no limit that I need to worry about. I wonder if he was talking about something else. Maybe a limit on how much I can donate at once to that location or something else along those lines. It would seem odd for him to be giving out tax advice without a little more backround.
I suppose I’ll just run it back up there, or maybe I’ll take half there and half somewhere else.
I’ve talked to folks who put a value of $100-150 on each bag of clothing they donate. That’s a BS value, but as drpepper said, the IRS lets you figrure the value and as long it’s collectively not far enough out to trigger an audit you’ll likely sneak by.
Perhaps the Goodwill guy was expecting you’d do the same and he was warning you that if the total of all the bags came to over $500 you’d be buying into a problem later.
So just donate a few bags a week until you get rid of all of them.
Just want to pop in and clarify, it makes no difference whether you do this in one trip or ten, at one thrift store of 4, if the total for the year that you want to deduct on your tax return is over the $500 mark, you’re still filing that form.
In my experience (ymmv) the goodwill guy, if they write down anything at all on the receipt, is pretty generic: "5 bags, “furniture”, whatever. I jot down the detail on that same receipt, space permitting, when you get home, to help with your recordkeeping.
> . . . used clothing must be in good condition or better . . .
This is important. Don’t donate clothes that aren’t in at least good condition. Throw them out if they aren’t that good. Clothes with significant stains or which look significantly worn can’t be fixed for any reasonable cost. The charity you donate them to will have to throw the clothes out themselves, and that will mean that they will be charged for the cost of hauling them away. As I understand it, only about 10% of clothes in good condition or better donated to U.S. charities will be sold in U.S. charity shops. 90% of them will be shipped to third world countries to be sold there. As for how much to declare as a deduction for taxes, assume that the clothes will be sold in a downmarket, funky charity shop. In other words, the clothes will not be sold for very much, and that’s all you can deduct on your taxes.
We (a 501c3 charity) sometimes accept “stuff” donations. Donors often want us to provide the valuation which, as stated upthread, is the donor’s responsibility to justify, not ours. And donors typically want a written acknowledgement from us, attesting to their donation. So, for our own protection, we explain the system and ask them to assign a value. We may even, for high ticket items, strongly suggest that they obtain a professional appraisal. Then we use a form letter that contains wording like:
We are pleased to accept your donation of the used 1987 five horsepower gasoline lawn mower with the broken wheel and cracked cowling. And we accept your estimate of its “fair market value” of one hundred dollars ($100.00). We further state that we provided nothing to you in return for this donation. Thank you for your support.
That way the donor cannot use our letter to fraudulently claim that we provided the valuation.
Let me clarify real quick, all the clothing is gently used, hell some of it is still pretty much new. So that’s not an issue.
Everything is in boxes, but my wife wrote out an itemized list for ourselves. There’s about 200 items of clothing, alot of shirts, sweatshirts, sweaters (all womens). Let’s say I feel each piece is worth $5*. Am I safe to just drop off half the stuff, and call it $500 (I’ll write out the value of each item to come to around that, I won’t just itemize it as “Clothes - $500”) and take the rest of it some time in the next tax year?
*I’m sure alot of it is worth more then that, but if $500 seems to be the magic number I really don’t want to be feathering this stuff into Goodwill for the next 4 tax years. I would rather just get it out of my garage.
Are you sure about that? Lines 15 and 16 of Schedule A (Gifts to Charity) say this:
What would the $250 threshold in line 16 refer to?
Moreover, the part of the instructions I quoted above say, “The amount of any money contributed and a description (but not value) of any property donated.” (my bold)–it doesn’t seem like that would be necessary if the $250 threshold only applied to monetary donations.
> . . . I’m sure alot of it is worth more then that . . .
Don’t be so sure. Walk through Goodwill’s used clothing section and try to find clothing similar to what you’re donating. The prices on such clothing are the absolute most that Goodwill will be making from your donations. Much of it will get sold to bulk clothing wholesalers (to be shipped to third world countries) for much less.
Something I’ve been wondering. I have a one or two items of clothing that are in otherwise good condition, but have come apart at a seam. So, they might be easily fixed by someone who could do basic sewing (unlike me). Would they be worth donating anywhere?
This wouldn’t be of any financial benefit, as I don’t itemize. It just seems a shame to throw them away.
Joey: Sure, you can give 1/2 in this tax year, 1/2 in the next tax year, to avoid filling out the form. Or you could give the whole shebang just to get rid of it and call it $500 on this year’s returns (losing any deduction for next year). Again, it’s up to you to value the stuff and keep appropriate records.
So should I just take it all in, and put down whatever I feel is fair? Like I said before, it’s about 200 items, I can’t imagine it being much over $500, maybe $600 or somewhere in there. As for an audit, as much as I would rather avoid something like that, I got nothing to hide. I work one job, have one savings account, own one stock, and have a mortgage. My ‘tax life’ isn’t very interesting and would take the tax man about 10 minutes to pick through.