You'll need to sign in or create an account to connect with an expert.
The documentation required for charitable donations is described in IRS publication 526.
https://www.irs.gov/pub/irs-pdf/p526.pdf
For item donations more than $500, you are required to have an itemized list (inventory) of items with the following information:
a. When acquired or purchased (approximately)
b. The cost
c. A description with enough detail to determine the fair market value, including condition (fair, good, or better)
d. The fair market value you assigned.
e. The method you used to determine the fair market value.
You also need a signed receipt from the donee organization. The IRS used to accept blank receipts from drop boxes, but they removed that comment from publication 526 a while ago. And, if donating a large number of items, it is good practice to get a representative from the charity to sign a copy of your inventory to show that is what you actually donated. (The IRS may not feel that a Salvation Army receipt that says "10 bags of clothes" is sufficient to show that you actually donated each and every item on your inventory.) Photos of large donations are also a good idea.
For donations with a claimed value of over $5000 for any single item or "group of similar items" you need a signed appraisal by a qualified appraiser and a representative of the charity and the appraiser must sign a copy of form 8323 that you will mail to the IRS after e-filing. There is no clear definition on what constitutes a "group of similar items", although "used clothing" would very likely count. But if you donated, for example, $3000 of used clothing and $3000 of used furniture, it's not clear if the IRS would accept that they are two different groups under $5000, or one single group over $5000 (maybe called "used personal items" or something.)
The IRS may also be concerned if you claimed a donation of $5000 of clothing but your annual income is so low that they might suspect you couldn't have afforded to buy that much. You might want to explain that (for example, you lost weight and are donating many years worth of bigger clothes all at once.)
If you used ItsDeductible to value your items, you will also want to show that those values are reasonable for your area. For example, if ItsDeductible values dress slacks at $10 but the Salvation Army store in your area sells them for $5.99, then $5.99 is probably the more accurate fair market value. Also, if Turbotax values dress shoes at $15 per pair, but you normally buy your dress shoes at Payless and only pay $20 to start with, then $15 is probably not an accurate FMV for your particular donation.
Using Turbotax Desktop version (installed on your own Mac or PC) you can print itemized worksheets for each donation using Forms mode that show the item, price and condition. But that will not substitute for your own inventory because it only shows what you typed into the program, not what you actually donated, and you might have typed your donation into Turbotax many months after making the donation. The IRS is looking for timely or contemporaneous records.
If this is a correspondence audit (they are asking you to send proof of your charitable donations or all your schedule A itemized donations to a particular office) then gather all the proof you have and write a letter of explanation, and send it all in. Keep copies, and use a mail service that provides tracking and proof of delivery.
Still have questions?
Questions are answered within a few hours on average.
Post a Question*Must create login to post
Ask questions and learn more about your taxes and finances.
misha0926
Level 1
SLYKTAX
Level 5
jbrad95_
New Member
holtm70
Level 2
kstrauss-taxquick
Level 1