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How Do I Value Property I Donated To a Charity?

If you donate furniture, clothes or other personal property to a church or charity, you can generally deduct the item's "fair market value" at the time of the donation. Generally, we refer to a "thrift shop" value to describe the amount that a used clothing or furniture item would be worth to a purchaser of second-hand property.

The amount you claim cannot exceed what you originally paid for the item, or, in the case of a gift or inheritance, its tax basis. If you claimed deductions for the property in connection with your investments or a business, your deduction is further limited to the cost less the deductions claimed.

Example: Brad donated a computer to his church. He originally paid $2,000 for the computer, and claimed $1,600 in depreciation deductions in his business. The computer company told him the machine is now worth $1,200. He can deduct the lower of $1,200 or ($2,000 - $1,600 = $400). His deduction is limited to $400.

If your total non-cash contributions for the year are above $500, you will need to complete and attach Form 8283 to your return. Also refer to the instructions to that form if you are donating capital gain property (stocks, land, etc.) or artwork.

If any individual donation will be valued at $250 or more, see the next report below for special receipts needed.

 

 

 

 

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Disclaimer
We do not offer legal advice. All information provided on this website is for informational purposes only and is not a substitute for proper legal advice. If you have legal questions, we recommend that you seek the advice of legal professionals.

Tax Disclaimer: To ensure compliance with IRS Rules, any U.S. federal tax advice provided in this communication is not intended or written to be used, and it cannot be used by the recipient or any other taxpayer (i) for the purpose of avoiding tax penalties that may be imposed on the recipient or any other taxpayer under the Internal Revenue Code, or (ii) in promoting, marketing or recommending to another party a partnership or other entity, investment plan, arrangement or other transaction addressed herein.

Copyright 2017 Wink Tax Services / Wink Inc.
Last modified: January 30, 2017