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Can someone tell me about donations to charity. Market value versus what the charity sold it for. Which can I deduct? Market value was more.

 
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JulieCo
New Member

Can someone tell me about donations to charity. Market value versus what the charity sold it for. Which can I deduct? Market value was more.

You will need to use the value of what the charity sold it for.  

Here is information regarding Fair Market Value from IRS Publication 561.  

NOTE: Example 1 below states you need to take into account where the item was sold from, as typically from a charity store the FMV is what typical buyers of that store would pay.

Per IRS Publication 561 -- What Is Fair Market Value (FMV)?

To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution.

Fair market value. 

Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction.

Example 1.

If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Usually, such items are worth far less than what you paid for them.

Example 2.

If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted.

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1 Reply
JulieCo
New Member

Can someone tell me about donations to charity. Market value versus what the charity sold it for. Which can I deduct? Market value was more.

You will need to use the value of what the charity sold it for.  

Here is information regarding Fair Market Value from IRS Publication 561.  

NOTE: Example 1 below states you need to take into account where the item was sold from, as typically from a charity store the FMV is what typical buyers of that store would pay.

Per IRS Publication 561 -- What Is Fair Market Value (FMV)?

To figure how much you may deduct for property that you contribute, you must first determine its fair market value on the date of the contribution.

Fair market value. 

Fair market value (FMV) is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. If you put a restriction on the use of property you donate, the FMV must reflect that restriction.

Example 1.

If you give used clothing to the Salvation Army, the FMV would be the price that typical buyers actually pay for clothing of this age, condition, style, and use. Usually, such items are worth far less than what you paid for them.

Example 2.

If you donate land and restrict its use to agricultural purposes, you must value the land at its value for agricultural purposes, even though it would have a higher FMV if it were not restricted.

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