Deductions for charitable donations can be claimed for the amount of their fair market value, according to the Internal Revenue Service. Fair market value is the price that the property would likely sell for on the open market between two knowledgeable and willing parties.Continue Reading
Clothing and other items donated to Goodwill and similar places are typically valued at significantly less than their original retail price. Some factors that can affect the value of a donated item are its age, condition and demand. Items that are considered collectible by experts are generally valued higher than mass-produced items. Clothing and household items donated must be in good condition or better to be eligible for a deduction unless a certified appraiser has found the property to be worth the value of the deduction amount.
Deductions for donated items exceeding $5,000 in value must be accompanied by a qualified appraisal for verification. The IRS has specific filing requirements for donations consisting of certain types of property, such as boats, automobiles and inventory. Special procedures must also be followed for cash or land donations. An accountant can help people determine the value of their charitable donations. The IRS also has helpful information on their website, IRS.gov.Learn more about Business & Finance