Fair Market Value of Charitable Donations (ASL) - YouTube video text script
Hi, I’m Craig and I work for the IRS.
Do you donate non-cash items to charity?
Millions do every year to qualified charitable organizations.
And as a result, they can lower their tax bill.
Normally, if you give used clothing or other household items to charity, these items must be in good condition or better.
As a general rule, that’s the only way you can get a tax deduction.
Your deduction is the Fair Market Value of the item you donate.
Basically, Fair Market Value is what a willing buyer would pay a willing seller for the item.
Usually it’s much less than the original retail price of the item.
For example, you paid $1,000 for a brand new computer several years ago. Now, you are ready to donate it. The deduction would not be based on your original $1,000 purchase price, but instead on the amount it’s worth today.
Keeping good tax records is always a good idea, so ask the charity for a receipt.
And be sure to keep a list of what you donated.
And finally, you must itemize your deductions on Schedule A in order to benefit.
For more information on Charitable Contributions, download IRS Publication 526 at www.IRS.gov