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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

Page Last Reviewed or Updated: 19-Feb-2014