How to Find Donation Values
When you donate money or goods to charity, you can deduct the fair market value of the contribution on your income taxes. Estimating the value of the donated item is your responsibility, not the charity's, and IRS rules state that the item must be in good or better condition. You can estimate the value yourself, with some help, if the item is inexpensive. For donations of greater value, however, it's best to consult an expert to have your property appraised. The money that you may spend having the item accurately priced will save you tax headaches in the long run.
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Instructions
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Free Appraisals
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Search completed auctions on eBay for items comparable to those you intend to donate. This will tell you what an item actually sold for, not the merely the asking price. This information is useful because it gives you a good idea of the item's fair market value; there's no theory or subjective guesswork involved. Keep in mind, however, that auction prices fluctuate, so hiring a professional appraiser may still be a good idea.
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Consult price guides. Go to the antique section of bookstores such as Barnes & Noble or Borders and peruse the numerous guides available for estimating the value of various items. You may also find price guides at your local library. In addition, the Salvation Army has an online donation value guide for everything from shirts and books to cars and washing machines (see Resources).
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Attend a free appraisal fair. Local auctioneers and antique professionals will often hold a free appraisal fair to attract business. Just show up with your item and a professional will tell you what it is worth. Keep your eye on the classifieds section of the local newspaper for these events.
Professional Appraisals
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Pay for a professional appraisal if your initial research using the steps above indicates that the item you are donating has substantial value. Appraisers might tell you that your item is worth more than you expected, so you'll be able to deduct more on your taxes. Appraisers list their services online and in the Yellow Pages.
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Examine the appraiser's credentials. Expertise is highly desirable and gives credence to the accuracy of the appraisal. If possible, find an appraiser who specializes in the type of item that you are donating. If in doubt, consider getting a second opinion.
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Use charitable donation tax tracking software offered by tax software publishers such as TurboTax (itsdeductible.com) and H&R Block (Deduction Pro). These tax preparation companies use IRS-approved sources to estimate the fair market value of your donated items.
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Tips & Warnings
Find an appraiser who follows a code of ethics. If he charges a flat fee to appraise your item, he won't make you an offer to buy the item or charge a fee based on the item's value. Doing so would be a conflict of interest. Find another appraiser if this occurs.
References
Resources
- Photo Credit Donations image by Rebs O from Fotolia.com
