Determining Value of Donated Items

• The latest federal tax laws now require that all donated household items must be in good condition or better ("fair" no longer being acceptable). Charities are not required to tell you how much your items are worth and will not include that information on a receipt. However, organizations such as Goodwill and the Salvation Army have online valuation guides you can use to determine the value of your donated items (included in the links below).
  
  Another alternative to valuation guides in a pinch is to use 25 percent of the original purchase price as a guide to determine the value of a donated item. It might seem common sense, but you can never claim more than the cost of the item when you bought it, nor can the value of your charitable deductions exceed 50 percent of your adjusted gross income (anything above can be carried forward in future years).
  
  Although you can keep records the old-fashioned, way with pen and paper, there are several computer software programs available to do this for you. These programs use data from IRS-approved sources in order to find the highest fair market value for your donated items. Examples of such programs are TaxCut Deduction Pro (for a minimal fee), DeductionTraQ (with free and paid features), and TurboTax ItsDeductible Online (which is free).
  
  

Documentation & IRS Forms

• Get signed, dated, detailed receipts for all donated items indicating the exact item(s) and numbers you donated, as well as the condition they were in and the date(s) on which they were donated. Try to get in the habit of keeping receipts for all new items you purchase so you'll have the original purchase price available when you donate that item in the future. A photo of the items you're donating is also a good idea.
  
  To determine if the charity you're donating to is on the list of qualified organizations, check IRS Publication 78, "Cumulative List of Organizations." If the total of all your donated property totals more than $500, you'll need to file IRS Form 8283 with your tax return and list the total contribution amount on line 17 on Schedule A.
  
  Any single item, or several similar items donated at once or in a single year, which are valued at $5,000 or more must be appraised by a qualified appraiser before the donation is made, and you must attach an appraisal summary (Section B of Form 8283) to your tax return. A qualified appraiser will be someone who is authorized to complete Part III, Declaration of Appraiser, of Section B, a question you can ask of potential appraisers beforehand.
  
  For more information on the IRS guidelines for donated charitable items, check out their publications on Irs.gov, including Publication 561, "Determining the Value of Donated Property" and Publication 526, "Charitable Contributions."