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Early last year, I donated some clothes to Goodwill and received a donation receipt for "one bag of clothing."

I have no memory or documentation of exact contents to calculate an amount.

Given only the receipt, what is an acceptable value?

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As a sort of meta comment, this question can't possibly matter. Nobody is jumping out of the standard deduction because of a bag of old clothes. –  lwburk Feb 4 '13 at 19:18
    
Would a receipt from the charitable organization with a $ amount on it suffice? Example: a receipt from the Salvation Army for $400 worth of clothing? –  Roc yesterday
    
Yes, but you are extremely unlikely to get such a receipt. Most groups will explicitly tell you that they WILL NOT provide a valuation for tax purposes, because they don't know the fair market value either until it either sells or fails to do so. If you're extremely lucky they may have an info sheet that gives you some general guidelines, but even that is extremely rare. The only time I've ever gotten valuations from charities were when donating cars for auction, where they tell me later what the auction actually brought in for them. –  keshlam 23 hours ago
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This question can matter if you're already deducting, just as being able to write off the fairly trivial 14 cents per mile (or whatever it is) if you drove for charity projects can add up to enough to be worth mentioning if you're already over the threshold. –  keshlam 23 hours ago
    
@lwburk - Where did he imply that? As keshlam noted, he might already itemize, so every donated sock helps. –  JoeTaxpayer 20 hours ago

2 Answers 2

up vote 6 down vote accepted

$0.00.

If audited, you'll have to show an itemized list of donated items, and the value for each based on their sale price in that thrift shop.

You should always keep a list of what you donate, the donation centres don't have the time or capacity to write and evaluate every single piece of old clothes that everyone donates, they just take the bags and that's it. It is your responsibility to keep the adequate records.

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Really? The value as sold? Is there a generally accepted guide to putting a value on such things? I believe you, but the level of details required in an audit seems to be a disincentive to donating. Is this because it is so difficult to donate enough bags of clothes to get to the donation level where tax donations come into play at all? –  MrChrister Jan 30 '13 at 21:53
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@MrChrister the IRS require "fair market value". IMHO, taking the current sale price is the fairest there is, no-one can argue that its worth less than what its sold for. Anything else can be attacked as inaccurate.' –  littleadv Jan 30 '13 at 22:32
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@MrChrister - few would get to itemize based solely on bags of clothes. But donations are aggregated, so if you already itemize, the donations help from that first tshirt. –  JoeTaxpayer Feb 1 '13 at 4:37
    
Your best best is to keep a complete list, see what similar items in similar condition are selling for in the charity's stores, and calculate it yourself. Alternatively, for some things, you can see what similar items in similar condition are generally selling for on eBay. There are software tools which attempt to gather that kind of info for you, but I've never found them especially useful. –  keshlam 23 hours ago
    
@MrChrister - "Consignment shop value" is accepted by the IRS. It's tough to donate enough for this to allow you to itemize, but if you already itemize, the clothing donations add up. Over the years, I've been careful to keep the clothing donations to less than 1/4 of the cash donations. In my opinion, you don't want to show $40K in taxable income and $10K in donated clothing. –  JoeTaxpayer 20 hours ago

Charitable donations require a lot of record keeping. If you don't have those records, you don't have a write off.

Unless that bag of clothes raises your donation levels to the point of a write off, I wouldn't worry about counting it.

From the H&R Block Site on Charitable Donations

Record Keeping Requirements

Noncash donations of less than $250

The organization must give a receipt showing:

  • Organization’s name and address
  • Date and location of donation
  • Reasonably detailed description of the property donated

However, you don’t have to get a receipt if it’s impossible or impractical, like when property is donated at an unattended drop-off site. In these cases, you must keep a reliable written record for each donated item showing:

  • Organization’s name and address
  • Date and location of donation
  • Reasonably detailed description of the property donated
  • Fair market value of the donation at the time of donation with explanation telling how you figured the fair market value
  • Cost or other basis you had in the donation if you must reduce the fair market value by appreciation. The record must also show the amount of the reduction and how you figured it.
  • You might be contributing less than the entire interest in the donation. If so, you must show the amount you’re claiming as a deduction for the year as a result of the donation.
  • If the other portion of the interest has been donated, you must provide details of each donation of the other interests.
  • Terms and conditions attached to the donation

Valuation of donated items

Item Donations

Donating property can earn you a deduction just as donating money can. Property donations are usually used clothing and household goods. Your write-off for these is the fair market value of the property at the time you give it.

Item donations must be in good used condition to qualify for a deduction. "Good used condition" isn’t defined. However, only deduct donations the organization plans to sell or to use for its charitable purposes. If an item is heavily worn, ask the organization if it will sell or use the item.

It’s often difficult to determine the fair market value of used items. Even the IRS has no stated amounts considered acceptable for these items. However, the Salvation Army publishes a guide providing the average prices of clothing, furniture, and household items in its stores. You can use this guide to establish the value of these items.

To learn more, see IRS Publication 561: Determining the Value of Donated Property.

When you donate a vehicle to a charity, special rules apply. If the charity sells the vehicle, the charity must send you a Form 1098-C within 30 days of the sale telling you the sales price. This sets the amount you can deduct on your return.

However, there's 1 exception. If the claimed car’s value is $500 or less, you can deduct the value of the donated vehicle. You’ll still deduct the vehicle's fair market value at the time of the donation if the charity:

  • Makes substantial improvements to the car
  • Fixes up the car and sells it
  • Gives it to a needy person
  • Uses it in its charitable efforts

To learn more, see IRS Publication 526: Charitable Contributions.

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As a practical matter, if you have substantial cash donations to charity that you are deducting (e.g. you tithe) and you list small amounts of noncash donations, the IRS is unlikely to ask for copies of paperwork supporting the value of the items donated. If you claim $4000 worth of clothing donations (say) and only $50 in cash donations, chances of a challenge are much higher. If you are selected (at random) for a Taxpayer Compliance Measurement Program (TCMP) audit, you will have to prove everything on your return including marriage, children's birth certificates and SSNs etc. –  Dilip Sarwate Jan 30 '13 at 23:36
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None of the previous comment should be construed as an encouragement to make false claims about the value of items donated. You must keep proper records as both littleadv's and Mr Christer's answers state, and you must not deduct more than the fair value of the items. –  Dilip Sarwate Jan 30 '13 at 23:40
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One option is "consignment shop" sale price. They aren't in business selling dress shirts for $1. I'd argue that the salvation army model is there to help people, not to get the highest price. –  JoeTaxpayer Jan 31 '13 at 14:24

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