How to Value Donations for Taxes

If you have made a donation to an organization that you want to claim on your taxes, you can claim only the fair market value of that donated item. According to the Internal Revenue Service, a single formula or guide to determining the fair market value of donations does not exist. With that in mind, working within certain parameters such as market sales price, replacement cost and comparable item sales price, you can come up with an appropriate donation value.

Instructions

1. Consult a value guide or guidebook, such as Kelley Blue Book (see Resources) for vehicles or Kovels (see Resources) for antiques and collectibles. Such guides may not exist for the item that you have donated, such as clothing. In fact, for items such as houses, you must get a professional appraisal.

2. Look in the classifieds ads of your local newspaper to find pricing on similar items. Use a range of prices on the item to estimate a fair market value for your donated item.

3. Use the donation value guide on the Salvation Army website (see Resources) for pricing on donations of appliances, clothing, furniture, household goods and miscellaneous items.

4. Consult an online marketplace, such as eBay or Craigslist, to determine the sales price of items you donated. Filter your search results to look at only completed listings so that you can see items that actually sold. This will help you arrive at a realistic amount to cover the replacement cost of your donations.

References

• Bankrate: Tax valuation guide for donated goods
• CC Personal Finance: How To Value Charitable Donations For Your Taxes
• IRS: Publication 561 - Determining the Value of Donated Property

Resources

• Kovels: Antique and Collectibles Price Guide
• Kelley Blue Book: Car Value Guide
• Salvation Army: Donation Value Guide