Value of Donated Goods

One listener wants to know whether she’ll lose out on a tax benefit just ‘cause she’s a great shopper. I’m Amy E. Feldman.

Shirley bought furniture at a retail store when it went on sale for about a third off. Unfortunately, she soon realized she liked the price tag more than the furniture and decided to donate it. But she wants to know how much she can write off for tax purposes. It’s easy to fill out a tax form when you’ve donated money ‘cause you know exactly how much you’ve given.  

But how does a charity calculate the value of goods you’ve donated? Well, they don’t. You do. The charity will provide a receipt that describes but doesn’t value the contribution. It’s up to the taxpayer to indicate the value of the deduction based on their evidence, research, or receipt to determine the fair market value. But unless an item appreciated in value since you bought it, you can’t value it at more than you paid, even if you managed to get a great deal when you bought it.

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