How to Claim Donated Items on Income Tax
When you donate non-cash items to a charitable organization it is frequently better than trying to sell the item on eBay or just trashing it. The charity benefits and you can usually claim donated items on income tax, provided you itemize deductions. To get the deduction, you must follow IRS rules or IRS staffers may disallow the deduction. Although all non-cash items fall under the same set of IRS guidelines, special rules apply to some types of donated goods like cars, clothing and household goods. Most of the forms you'll need are available for downloading in PDF format. See the Resources section below for links.
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Things You'll Need
- Itemized receipts
- Schedule A, Form 1040
- Form 8283
- Form 1098-C
- Publication 526
Instructions
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Check to be sure the organization is a qualified charity under IRS rules before you donate. IRS Publication 78 (Qualified Charities) is a periodically updated list of these charities. It may not include churches and some government programs, which are qualified but not required to register. When you make a non-cash donation, get an itemized receipt listing the item(s) along with their estimated value.
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File an itemized return. In general you need to have sufficient total deductions (not just charitable deductions) to exceed the standard deduction to derive any net benefit. Most of the time, this will be the case, especially if you have a mortgage. To claim donated items on income taxes, file Schedule A, Form 1040 with your income tax return. The total value of non-cash detonations claimed goes on line 17 of Schedule A.
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Fill out IRS Form 8283 if your total non-cash contributions exceed $500. For smaller items, use section A. If you have any donations of $5000 or greater, these must each be listed separately in section B. The IRS guidelines state that non-cash charitable deductions of over $500 may be disallowed if you don't file Form 8283.
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Estimate the value of clothing and household goods you have donated. If the items are to be sold by the organization to raise funds, ask for a statement documenting the sale price. If you donate anything that is not in good condition, but you think has a value of $500 or more, you must include an appraisal of the item (designer clothing, for example).
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Include a completed Form 1098-C with your tax return for any vehicle donations. Qualified charities are required to provide you this form within 30 days of the sale. For vehicles (including boats and aircraft) you can deduct the sale price, not fair market value, unless the vehicle is sold for less than $500. In that case you can use fair market value up to $499. You may also use fair market value if the organization makes substantial repairs to the vehicle or keeps it for its own use.
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Tips & Warnings
If you need assistance, call the IRS Taxpayer Advocate Service toll free at (877)777-4775 (TTY/TDD 1-800-829-4059). As of 2009 the online PDF version of Form 1098-C was only a sample and not considered official by the IRS. To order Form 1098-C call toll free at (800) 829-3676.
