charitable donations

[gcordelli]

We purchased a new sewing machine on Amazon to donate to a charity because it was on their "wish list" of needed items.  I assume that we can deduct the full purchase price, since only a day transpired between receiving the item and delivering it to the charity.  However, I don't know if it should be listed as a "cash" donation for the purchase price or a "non-cash" donation for same amount -- and if the latter, how do I describe the "valuation method" of the item?

[AlanT222 · Accepted solution]

The charitable donation must be listed as a non-cash contribution since you are giving equipment and not cash.  

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

Fair market value (FMV) is the price that the 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.

In making and supporting the valuation of property, all factors affecting value are relevant and must be considered. These include:

• The cost or selling price of the item,

• Sales of comparable properties,

• Replacement cost, and

• Opinions of experts.

Considering you purchased the sewing machine on the same day you donated it, the FMV would be the price you paid for it.