Things to know about Donating Items!

How to donate clothing and household goods the right way so that you can qualify to keep your tax deductions.

 When you donate clothing and household items, you need to know/have this information:

• You need to find charities that qualify to receive clothing and household items

• The types of clothing and household items you can give to a charity

• How to value the deductions for clothing and household items

• Records you need to keep

• How to escape accuracy-related penalties

The bottom line:

Donating your used clothing and household items to a worthy charity does three great things:

 1. Gives you a tax deduction (if you itemize) so you pay less in taxes

2. Helps a worthy charity

3. Cleans out the junk and used items from your house

To find charities that qualify to receive clothing and household items.....or even ones you can donate money to, you need to make sure they are recognized by the IRS as such an organization. So many people out there have found themselves trying to claim amounts donated to find themselves unable to because they ended up donating to a fake charity. To make sure you can click on this link https://www.irs.gov/charities-non-profits/tax-exempt-organization-search And go through there to see who is on that list.

Now the types of clothing, items and how to value all depends.....here is what the IRS website says...

Contributions Subject to Special Rules

Special rules apply if you contribute:

• Clothing or household items;

• A car, boat, or airplane;

• Taxidermy property;

• Property subject to a debt;

• A partial interest in property;

• A fractional interest in tangible personal property;

• A qualified conservation contribution;

• A future interest in tangible personal property;

• Inventory from your business; or

• A patent or other intellectual property.

These special rules are described next.

Clothing and Household Items

You can't take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better.

Exception.

You can take a deduction for a contribution of an item of clothing or a household item that isn't in good used condition or better if you deduct more than $500 for it, and include a qualified appraisal prepared by a qualified appraiser and a completed Form 8283, Section B.

Household items.

Household items include:

• Furniture and furnishings,

• Electronics,

• Appliances,

• Linens, and

• Other similar items.

Household items don't include:

• Food;

• Paintings, antiques, and other objects of art;

• Jewelry and gems; and

• Collections.

FMV.

To determine the FMV of these items, use the rules under Determining FMV, later.

Cars, Boats, and Airplanes

The following rules apply to any donation of a qualified vehicle.

A qualified vehicle is:

• A car or any motor vehicle manufactured mainly for use on public streets, roads, and highways;

• A boat; or

• An airplane.

Deduction more than $500.

If you donate a qualified vehicle with a claimed FMV of more than $500, you can deduct the smaller of:

• The gross proceeds from the sale of the vehicle by the organization, or

• The vehicle's FMV on the date of the contribution. If the vehicle's FMV was more than your cost or other basis, you may have to reduce the FMV to figure the deductible amount, as described under Giving Property That Has Increased in Value, later.

Now it does go on to explain more about all this, just go to https://www.irs.gov/publications/p526#en_US_2023_publink100077018 to read further.

REMEMBER

You want those receipts that show the proof of your donations, have a list of the items donated...this helps with figuring out that FMV (Fair Market Value) and it doesn't hurt to have how much you paid for the items yourself on hand either.

Of course if you have any questions, feel free to call us at 208-254-0804. We look forward seeing you all again soon!