One of the best ways to give back to the community while earning a tax deduction is to donate non cash items, like clothing or dry goods. However, it can be difficult to understand the charitable contributions value for a non cash donation due to the broad spectrum of price ranges assigned to any number of items. Here, we break down how to better assign a charitable contributions value for a non cash donation.
General Guidelines
There are some general guidelines that apply to a charitable contributions value regardless of its category. One of these rules is that the donor may not deduct more than the fair market value of the object at the time of the donation. In order to determine the fair market value for items worth less than $5,000, the Internal Revenue Service (IRS) encourages a donor to think on these factors: the item’s original cost, the cost of items similar to it, the cost to replace the item, and an expert’s opinion if necessary.
Clothing Guidelines
A clothing-specific guideline for a charitable contributions value is that the clothing donated must be in good condition or better, according to the IRS, in order to receive a tax deduction. To help with this process, many non-profit organizations define what they consider as “good or better” on their website, or will explain in person.
Clothing is also usually worth far less than the donor may have originally paid for it. This is due to the frequency of wear-and-tear on any given piece of clothing. For example, the Salvation Army suggests that a “high” non cash donation charitable contributions value for any given pair of children’s of jeans not be more than $12. Likewise, a ladies’ handbag, often purchased for large amounts of money, is donated at best with a charitable contributions value of $20.
Appliances and Furniture Guidelines
Many appliances and furniture have often seen a decent amount of use by the time they are part of a non cash donation. Due to the intense use of most of these items, items such as appliances will rgenerallyTo deduct a donated noncash item worth over $250, you need a contemporaneous written acknowledgement from the charity.
Household Items and Miscellaneous Guidelines
Household items tend to have a lower charitable contributions value due to their lower fair market values. For example, a set of towels has a charitable contributions value of anywhere from $0.50 – $4.00. Certain miscellaneous items, however, can have an excellent charitable contributions value. A complete computer system can have a value of anywhere from $100 – $400. Likewise, a vacuum cleaner as a non cash donation can net up to $65.
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