Donations and Tax Deduction ???

[Nana2Callie]

My father in law recently passed away and we still have a garage full of items. I have a couple of questions:

1. If we donate - how do we determine value? Local place said they leave it up to us to fill in the blank.

2. If we use the online suggestions like from Intuit - it is several thousand dollars.

3. Will the IRS accept that?

4. How likely is it to trigger an audit (not that we've done anything illegal) but do not like the possibility of an audit either.

Thanks for your advice - I need our garage back.

We've already sold a lot of stuff. This is just the balance of stuff.

 

[scrapquitler]

My father in law recently passed away and we still have a garage full of items. I have a couple of questions:

1. If we donate - how do we determine value? Local place said they leave it up to us to fill in the blank.

2. If we use the online suggestions like from Intuit - it is several thousand dollars.

3. Will the IRS accept that?

4. How likely is it to trigger an audit (not that we've done anything illegal) but do not like the possibility of an audit either.

Thanks for your advice - I need our garage back.

We've already sold a lot of stuff. This is just the balance of stuff.

I think the IRS has a calculator about how to determine value for donated used items, and yes, they will accept the values based on that. Whatever place you donate them to will give you a receipt. I doubt it would trigger an audit unless you were donating ridiculously large amounts of things that don't make sense, the IRS is pretty used to estates donating items, it's not unusual.

 

[TheRustyScupper]

1. If we donate - how do we determine value? Local place said they leave it up to us to fill in the blank.
. . . most items are deducted at "garage sale" or "thrift store" value
. . . this is about 10¢ on the dollar

2. If we use the online suggestions like from Intuit - it is several thousand dollars.
. . . you can try it
. . . if you use the "thrift store" value, however, you will be fine

3. Will the IRS accept that?
. . . again, you can try it
. . . but, make sure you don't go overboard

4. How likely is it to trigger an audit (not that we've done anything illegal) but do not like the possibility of an audit either.
. . . IRS is looking hard at deductions
. . . especially for non-cash charity
. . . too many people value their goods at exceptionally high prices
. . . they, also, take the receipt and mark their own value
. . . Uncle Sam doesn't like that

 

[Deb & Bill]

The Salvation Army and Goodwill websites also have valuation guides for tax purposes.

 

[cajunprincess]

My father in law recently passed away and we still have a garage full of items. I have a couple of questions:

1. If we donate - how do we determine value? Local place said they leave it up to us to fill in the blank.

2. If we use the online suggestions like from Intuit - it is several thousand dollars.

3. Will the IRS accept that?

4. How likely is it to trigger an audit (not that we've done anything illegal) but do not like the possibility of an audit either.

Thanks for your advice - I need our garage back.

We've already sold a lot of stuff. This is just the balance of stuff.

1. When I was doing taxes, we typically used the valuation sheets on the Goodwill website if the clients didn't give us a value or if they valued the items way too high. We typically recommended taking the bottom range number. Most of the time, items aren't worth that much if you are willing to give them away.

2. In my opinion, tax programs typically overstate what items are worth.

3. The IRS can choose to audit you if you raise a red flag when they run it through their audit system.

4. It depends on a lot of things. The IRS usually picks out certain things they are going to look at more than others for example, one year they cracked down a lot more on gambling losses and wanted A LOT of proof. Also, they look at how much you make and how much you give away. If you are donating 45% off your income, it is more likely to raise a red flag. But it doesn't necessarily mean it will either.

My best advice is to document and have pictures of your items. Don't over inflate what items are worth. If you give away more than $500 worth of items, you have to give more details on the items bc you have to use a form for it. Hope this helps

 

[secretpantssam]

I always put in my stuff through Turbo Tax's It's Deductible. A few times when I've donated furniture and a lot of clothes it has gotten to $1200 and they haven't audited me yet (knock on wood).

 

[Doodlebug939]

It may seem overboard but I would consider taking some pictures of what you donated just in case there is an issue. I know that for me it is hard to remember what I donated so I typically take a few pictures (bigger stuff like furniture, household and so forth) So if there was an issue I had at least some kind of proof.

 

[mistysue]

My best advice is to document and have pictures of your items. Don't over inflate what items are worth. If you give away more than $500 worth of items, you have to give more details on the items bc you have to use a form for it. Hope this helps

This.
Imagine you get audited. I've been told that technically you are supposed to have you original receipt for purchasing the item. In most cases that is completely senseless, (and I don't think it's true) so the best you can do is keep some pictures with your return. Then when they say "prove it" you can show pictures and prove that the items existed. Anybody can get the receipt and write some crazy items on there, if you have pictures you look responsible and trustworthy.

 

[Cheshire Figment]

Intuit has a program called "It's Deductible" which both allows you to track items donated and gives three levels of estimated values. I think they also have a book available (or did a few years ago). They get data from both GW and SA, and the numbers are considered valid by IRS.

 

[jmartinez1895]

I second the idea of taking photos. That's what I do. When we have a yard sell, anything that does not sell I load up in the car and take tp the good will bin because I do not want to bring it back into the house. I take photos off it in groups before I load it up and then I print the photos out on regular paper and keep it with my hard copy of my tax return.

 

[travelitis]

We max out on donations every year. We claim most of the cash and none of the household goods. You reach a certain point that it won't get you more refund, but it will get you more scrutiny. I believe we've been able to claim 10% of our gross while donating 12% approx. You can play with it on Turbo Tax to see if you have donated more than actually helps your refund, and if you have, claim less. I see no reason to raise red flags with the IRS just because we give more than they think people would, should, or whatever. (This percentage isn't because of reaching a certain income level. We have done this at half the income, and the tax rules seemed to be the same.)

 

[imsayin]

We max out on donations every year. We claim most of the cash and none of the household goods. You reach a certain point that it won't get you more refund, but it will get you more scrutiny. I believe we've been able to claim 10% of our gross while donating 12% approx. You can play with it on Turbo Tax to see if you have donated more than actually helps your refund, and if you have, claim less. I see no reason to raise red flags with the IRS just because we give more than they think people would, should, or whatever. (This percentage isn't because of reaching a certain income level. We have done this at half the income, and the tax rules seemed to be the same.)

If your deductions are valid, you shouldn't be concerned with raising a red flag. Also, you can deduct up to 50% of your income in most cases, so I'm guessing your situation is out of the norm in terms of your total amount not affecting your taxes.

 

[luvmy3]

It may seem overboard but I would consider taking some pictures of what you donated just in case there is an issue. I know that for me it is hard to remember what I donated so I typically take a few pictures (bigger stuff like furniture, household and so forth) So if there was an issue I had at least some kind of proof.

That is what I did. I had 4 full bags of clothes, and for each bag I photographed the items and listed each item and its condition for each bag.
I used the link on Goodwill to determine each items value.

 

[CyndiLooWho]

We took thousands in write-offs in 2011 when we gutted the kitchen and finished the basement. We donated the all wood cabinets, a good name water heater, tons of good insulation.

When you have that much, you have to fill in a description for each donation - make it very detailed. "All wood kitchen cabinets - 15 @ $75 each, 40 gallon water heater - $75" etc. Even if you are flagged for review, the reviewer can easily see just why you are taking such large deductions. And if they call for more details, I have the forms for each donation to Habitat for Humanity, Salvation Army, etc.

I keep a detailed listing stapled to each of my donation receipts as well. Habitat listed detail about each load they picked up, and I made sure that each of my Sally Army receipts had enough detail to cover my list: adult and children's clothing, household goods, furniture, kitchen items. These covered the categories for my detailed list. One year, I did take pictures. We were moving and I got rid of TONS of stuff. I don't really do that anymore.

Is it overkill? Some would say yes. But I want my butt covered in an audit. Over the last 24 yrs of marriage - which include unemployment, self employment, large charitable donations, estate income, etc, the most I have ever gotten from the IRS was a letter saying we did not include a withdrawal from a CD. It took 15 minutes to draft the letter showing that while I forgot to include the withdrawal as income, the basis was fully taxed and had no tax impact (I had missed a 1099 on the back of another 1099. I was not expecting a tax impact or I would have caught it). Never even had to talk to an agent.

And I think "It's Deductible" gives you way too much credit. Salvation Army certainly doesn't charge $15 per pair for the shoes I give them.

 

[wiigirl]

The Salvation Army and Goodwill websites also have valuation guides for tax purposes.

Just go with the average value and keep good records and you will be fine.

 

[fab5friend99]

2 years ago I claimed almost $5k in non-cash deductions and no audit notice yet. I was moving and changing jobs and I cleaned out a lot of stuff that was still in the boxes I moved 7 years before plus a lot furniture.

I am in the CYA camp and I have pictures of everything and screenshots of the pricing from It's Deductible. I think there might be some reports in It's Deductible but I had so much stuff that it was easier to do my own spreadsheet to do the calculations.

 

[dawnball]

And I think "It's Deductible" gives you way too much credit. Salvation Army certainly doesn't charge $15 per pair for the shoes I give them.

"It's Deductible" doesn't take location into account, I think. Goodwill in my town doesn't sell shoes for less than $20/pair, or women's shirts for less than $10.

I take pictures of everything, keep an itemized list, and tend to value things in the midrange of the goodwill chart. It's less than things actually go for here, but accounts for items that don't make the cut for whatever reason.

I'd estimate the donation value (itemized lists and values, sorted by category), then discuss it with a tax professional before donating, just to make sure there aren't any threshold issues that would require an appraisal.