Estimating value of donated items
Tax time. If you are lucky, someone else (Hubby) does the number crunching and you (me) keep them well fed and on task. When it comes to estimating the value of donated goods, however, you are on your own. The IRS does not set specific values for donated goods, but lets you deduct "fair market value" for items in "good" condition or better.
As Debt-Proof Living warns, "If you estimate too high you could face an audit—with the requirement to prove and authenticate the values you assigned—and penalties if the IRS does not agree with your numbers. But if you value your donations too low, you stand to lose a lot of money you could have recouped."
Luckily, there are a number of pricing guides. The Salvation Army has a Valuation Guide with high and low numbers for dozens of items. Bicycles are $15 to $65, sweaters are $2.50 to $8, a floor lamp is $7.50 to $40.
Yahoo has a similar guide but it does not list as many items. Goodwill also lists a price range for items they sell in their stores, about as fair as fair market gets. A CPA named Jeffrey Campbell from Ohio lists high, low, and average value for many donated items on his personal site. His Web site says he has been a CPA for 15+ years, but his phone number and e-mail are listed if you want to double check.
Debt-Proof Living also recommends the booklet “MONEY-For Your Used Clothing; 2007 Tax Year” which they will sell to you for $20. The site claims the authors guarantee you will save at least $250 using their guide or they will give you your money back. Hmmm...with so many free guides I don't think it makes sense to buy a booklet unless you are really freaked out about a possible audit or have major items to donate and really want to be accurate.
