How to Determine the Donation Values for Clothing

According to Goodwill, a men's shirt has a donated value of between $3.50 and $10.00

Donations made to qualified organizations may be deducted on a tax return when itemizing deductions. This amount is generally limited to 50 percent of adjusted gross income. Contrary to popular belief, a value for the donated items should not be arbitrarily selected by the person donating the item. There are various guidelines available to determine the value of donated clothing. By using a combination of all such procedures, an accurate value for donated clothing can be found.

Instructions

1. Determine if the clothing is in good used condition or better. If not, the value of the clothing is not deductible for tax purposes and should be assigned a value of $0. If the clothing is in good used condition or better, continue to step two.

2. Calculate the fair market value of the clothing item. Normally this value is significantly less than what you paid for the item. Write down what you consider to be the fair market value of the item on a piece of paper.

3. Visit a local thrift store or consignment shop to determine the actual fair market value. According to the IRS, the price actually paid by buyers in consignment or thrift stores should be used as the fair market value. For example, if a thrift store is selling blouses for $3, then you should consider the donation of a blouse to a qualified organization as a $3 donation for tax purposes. Write this value down next to the value written in step two.

4. Search for the fair market value of the item online. Goodwill and the Salvation Army have an online value guide to help determine the value of clothing. For example, a woman's blouse is given a range of $3.50 to $10.00, dresses $5 to $15, skirts $4 to $10, and slacks $4 to $10. Write down this range next to the other two values written in steps 2 and 3.

5. Select the most appropriate value from the values written. If the value you assigned to the item in step two is within the range provided by the online chart in step four, select this as the donation value. If the value that you selected is not within the range, but the value found at a local thrift store in step three is within the range, use this value. If neither value from step 2 or 3 is within the range, select a value within the range -- keeping in mind that in accounting it is always better to use the lower, more conservative number.

References

• IRS; Publication 526
• Goodwill; Valuation Guide; January 2007