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Is Your Bag of Clothes Really Worth $500? Documenting Noncash Donations

October 24, 2017

Updated August 10, 2022

If you’ve ever felt unsure about your noncash donations, how much you can deduct, or what type of supporting documentation you need, keep reading. This article will help you understand your responsibilities for substantiation of noncash donations, and if your bag of clothes is really worth $500.

Documentation Requirements

The records you must keep for a noncash contribution vary depending on the amount of your deduction. A requirement for all noncash contributions is a receipt or other written acknowledgement from the charitable organization receiving the property donated. For proper documentation, any receipt or other written acknowledgement must contain:

 

FMV
<$250*

FMV
$250 - $499

FMV
$500 - $4,999

FMV
$5,000

The name of the charitable organization

 ✓  ✓  ✓

The date and location of the charitable contribution

 ✓  ✓  ✓  ✓
A detailed description of the property  ✓  ✓  ✓  ✓
Whether the organization provided any goods or services as a result of the contribution; and if so, a description and the value of those goods and services provided    ✓  ✓  ✓
Records of how the property was acquired (purchase, gift, inheritance, etc.)      ✓  ✓
The date the property was acquired by the taxpayer      ✓  ✓
The property’s cost or basis      ✓  ✓
A qualified appraisal of the item        ✓

*If it is impractical to acquire a receipt for a donation of less than $250, you are not required to have one (for example, if you leave property at a charity’s unattended drop site).

To determine the amount of your deduction for the table above, you should combine your claimed deductions for all comparable items of property donated to any charity during the year.

How to Value Your Donation


Clothing and household goods

Charitable organizations like Goodwill and The Salvation Army have compiled values for commonly donated items. The Goodwill Guide and The Salvation Army Guide can help you determine what your bag of clothes may really be worth to the organization you are donating them to.

Note, neither guide has a “bag of clothes” on their list. This is because it is ultimately up to you to determine what your clothing and household goods are worth and all bags of clothes are not created equal. The guides linked above are approximate values for individual items and thus require a line itemed list of what you are donating to determine the overall value of your donation.

Keep in mind that clothing and household items must be in good used condition or better. Any clothing or a household goods that are not in good used condition or better, but worth more than $500 due to age or uniqueness, requires an appraisal.

  • Take the time to document your files to support the value you assign to your donations.
  • Take pictures of noncash items you donate and keep those pictures with your tax files.
  • Make a detailed list of what you donated and attach it to the receipt(s) provided by the charitable organization(s).
  • Use the Guides linked above to assign a value to the items donated to determine the actual value of the bag(s) of clothes and household items donated.

Jewelry, paintings and antiques

Jewelry and gem donations almost always require an appraisal to determine their fair market value. Paintings, antiques and other objects of art require an appraisal unless the fair market value of the deduction is less than $5,000.

Car donations

The fair market value of a donated car is generally its private party selling price. Websites like Kelley Blue Book are an acceptable way to find the estimated sales price information. If the claimed value of the donated car is more than $500, your deduction is limited to the gross proceeds from its sale by the charitable organization. The charity you donated the car to should provide you with Form 1098-C which indicates the gross proceeds they received.

Final Thoughts

Record keeping is key! The IRS may ask to see detailed records supporting noncash donations if your return is selected for examination. Meeting the requirements in the chart above and keeping detailed records of how you determined the FMV of your noncash donations is essential to sustaining your contribution deductions if you are audited.

Contact us with any questions you have regarding substantiation of noncash charitable contributions.

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