Value of Donated Cell Phones for Taxes
A taxpayer can donate a cell phone to a qualified organization and deduct the fair-market value of the cell phone. Donation are deductible if the taxpayer itemizes his deductions on Form 1040 Schedule A Line 17. A taxpayer can use one of four techniques to value their cell phone: cost or selling price, sales of comparable goods, replacement costs or opinions of experts.
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Cost or Selling Price
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A taxpayer can use the actual cost or selling price of the donated cell phone when the purchase or sale of the cell phone was close to date it was donated. In this example, a person would need to buy the cell phone and then donate the cell phone shortly after the purchase.
Sales of Comparable Goods
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A taxpayer can use the sales of comparable goods to value their cell phone. The taxpayer must consider how comparable the property is, how close the sale of the property was from the date it was valued for donation, and the type of transaction the comparable cell phone had. In general, a taxpayer can look to a site like eBay or Amazon to see how much similar cell phones are selling.
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Replacement Cost
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A taxpayer can use the replacement cost of the cell phone. The replacement cost is cost to buy a new one minus depreciation from the donated cell phone. This is often hard to provide clear and accurate value.
Opinions of Experts
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Opinions of experts depend solely on the situation. A taxpayer will rarely use this valuation technique, but could with a qualified expert. A taxpayer may use this if the cell phone is an antique or considered rare and valuable.
Claiming the Deduction
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Claim the deduction on Form 1040 Schedule A Line 17. If valuing the cell phone for more than $500, the taxpayer must also file Form 8283.
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References
- Photo Credit my cell phone image by rafalwit from Fotolia.com
