@JanetA wrote:
You said: "There's no advantage to donating more often because all of your donations of similar items during the year are grouped together to determine the documentation needed. "
Are you saying if I donate $5400 worth of items, they are all counted as one donation? Donations over $5000 need a written appraisal, so I'm not sure that is correct. Could you post a link from the IRS stating that?
I believe this is unclear. You require an appraisal for a "group of similar items" over $5000, even if they are donated to different charities. I don't know of any specific guidance as to whether donations of household items spread out over time, constitutes a group of similar items. Partly it will depend on facts and circumstances, and the IRS rather famously uses a "substance over form" doctrine in their rulings. That is, a transaction can be improper if it has an improper purpose, even if the paperwork is technically correct. For example, suppose you need to dispose of the contents of a deceased relative's house. If you donated the items all at once to one charity, you would need an appraisal. If you donated the items to 5 different charities over 50 different donation days, that is technically under the $5000 limit per donation, but I think the IRS would likely use the "substance over form" rule to say it was really a donation of a "group of similar items" and deny the deduction without an appraisal and proper signatures.
Another principal that is quoted in many tax court cases is that "an income tax deduction is a matter of legislative grace and that the burden of clearly showing the right to the claimed deduction is on the taxpayer”.
I don't know of any Tax Court case or private letter ruling that gets into the details of how to decide if a group of donations falls under this rule (maybe there is, but I don't know about it. Another place to look might be the IRS manual for auditors).
I would say that if you are getting close to that $5000 limit, you may want professional tax advice, or you may want to hold your donations until you can get an appraisal. It's a risk you might be taking.
