Internal Revenue Service guidelines stipulate that taxpayers can deduct the fair market value of non-cash charitable donations, which is the normal price items sell for on the open market, reports the IRS. Special rules apply to some contributions, such as used clothing, household items and vehicles.Continue Reading
As of 2015, taxpayers can estimate the fair market value of most charitable items if the item is valued at less than $5,000, according to Nolo. When estimating the value of contributions, donors should consider the price they bought the item for, prices of comparable items at commercial outlets, the cost to replace the item and the opinion of experts. A qualified appraiser must estimate the value of items worth more than $5,000 for tax deduction purposes.
Used clothing and household items such as furniture, electronics, appliances and linens must be in good used condition or better for taxpayers to take tax deductions for the donations, states Nolo. The fair market value of these items is far less than the price the donor paid for them.
Taxpayers who donate vehicles can generally only value the vehicles for the price the charities sell the vehicle for, reports Nolo. However, if the vehicle is worth $500 or less, the taxpayer can deduct the estimated fair market value as of 2015. The donor can also deduct the estimated fair market value if the charity uses the vehicle for its work or donates the vehicle to a needy person.Learn more about Income Tax