Estimating the value of charitable donations

October 8, 2013 8:22 AM

What rules do you use for estimating the value of things you give to charity? The organizations we donate to ask us to estimate the value for tax purposes ourselves, rather than doing it for us. I know we obviously should not use the full price that we paid for the item. I am wondering if it is okay to value items at, for example, what we might get for them off Craigslist (sometimes say 1/3 to 1/2 or in rare cases even 2/3 what we paid, depending on the item and condition), or whether we should be valuing at more like what I'd use for a yard sale price of like 1/10th or lower. Does it matter? And is there a corresponding tax consequence for the recipient organization, such that if I declare the higher value on our taxes that organization realizes some proportionate tax or penalty? If so I should probably just estimate lower in order to further benefit the charity. Thanks!
posted by onlyconnect to Work & Money (13 answers total)

Best answer: Fair market value is about 30% of what it's worth. I use TurboTax and they have a thing called ItsDeductible. I just list everything I've donated and it automatically assigns a value.

There's no downside to the charity for your valuing something higher. They don't pay taxes on your donations.

Pretty Sweet!
posted by Ruthless Bunny at 8:29 AM on October 8, 2013

The Salvation Army publishes value guides on their regional websites. That's what I use. Seems like the best way to evaluate things, since if there are ever any questions, you will have something more authoritative to show the IRS.
posted by gjc at 8:36 AM on October 8, 2013

1/4 current list price is the rule of thumb I've heard most people use.
posted by Rash at 8:39 AM on October 8, 2013

Best answer: Here's a Salvation Army value guide. I use my judgment on valuing items in the ranges stated.
posted by ThePinkSuperhero at 8:47 AM on October 8, 2013 [1 favorite]

My Accountant Told Me It's What One Originally Pays.
posted by brujita at 10:48 AM on October 8, 2013

Best answer: Here is Goodwill's Guide as well.
posted by magnetsphere at 11:14 AM on October 8, 2013

Best answer: My accountant would disagree strongly with brujita's! She says to use either the published schedule from the charity (if they have one) or your best estimate of what you would get for the thing on eBay or Craigslist.
posted by Sidhedevil at 11:14 AM on October 8, 2013

My Accountant Told Me It's What One Originally Pays.

The instructions for the relevant 1040 form says how to evaluate the value of things. This is not what it says.
posted by gjc at 1:48 PM on October 8, 2013

Best answer: Here is the IRS publication on valuation of donated goods.

Just a sidenote that if you don't itemize your deductions (i.e. you take the standard deduction), this is a non-issue.
posted by melissasaurus at 3:16 PM on October 8, 2013

Also, if you do itemize your deductions, you need to be donating a heck of a lot of goods, or some actually valuable (>$100/item) for the work in maintaining lists of valuations to be worth the effort. Doing it for clothing or book donations is probably not worth it. Doing it for vehicle and large valuable furniture donations probably is.
posted by garlic at 6:10 PM on October 8, 2013

I Had To Tell Him Both What I Originally Paid And WhaT SA Valued.
posted by brujita at 6:19 PM on October 8, 2013

Response by poster: Thanks, everyone. You've scared me into making an extremely detailed list of our donations and their estimated fair market value. This is a huge year in donations for us because of a serious decluttering effort and giveaway of all our daughter's old baby stuff, clothes and toys, plus two closets of adult clothes, plus furniture, plus regular charitable cash donations, so we will definitely have enough to itemize this year. Now I will have the records to back it up. I have also sold a bunch of stuff on Craigslist and consignment this year and have a better than usual feel for what people are paying for used stuff. So this was a big help. Thanks!
posted by onlyconnect at 10:25 PM on October 8, 2013

Here's one more source for valuation information: Money for Your Used Clothing.
posted by jeri at 6:10 PM on October 25, 2013