Solved: Why is TurboTax lumping all of my charitable donations into one category?
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opalfe
New Member

Why is TurboTax lumping all of my charitable donations into one category?

I just received a letter from the IRS stating that they needed an appraisal for my charitable donations. I reviewed my tax info and realized that TurboTax lumped everything I donated into one category so it looks as though I donated a group of similar items over $5000. I need to know how to categorize my donations into similar groups. ie clothing, electronics, etc. so I can show the IRS that I didn't donate over $5000 of a single item or group of similar items.

1 Best answer

Accepted Solutions
Opus 17
Level 15

Why is TurboTax lumping all of my charitable donations into one category?

You don't need to amend.  At this point, you need to write a letter to the IRS along with a list of donations or a spreadsheet explaining what you did and why you think the items are in different categories.

(It'sDeductible uses the same category for everything entered via ItsDeductible, that's just the way it is designed.)

The IRS requires that you have an appraisal for any single item "or group of similar items" with a value more than $5000.  There is no black letter description of what constitutes a "group of similar items" and I have not seen any tax court cases on this.  So I really can't tell you whether "used clothing", "used electronics", "use furniture" etc. would be accepted as being different categories, or one category "used household items."

You don't need to amend to change the descriptions, what you need to to is write a letter explaining your argument that you have items of different categories and each category is under $5000.  You will need copies of your documentation; including information about how you acquired the items, the date you acquired them, the condition they were in, how you determined the fair market value, and a receipt from the organization.  All these documentation requirements are listed in publication 526 for donations valued at more than $500 and you will be in a very weak audit position without them. 

"ItsDeductible" values are not likely going to be accepted without some proof that the values used by ITsDeductible (which are generic nationwide values) actually correspond to values in your area. (Other customers have written in that their values were not accepted.)  Proof would include proof of sales from eBay and local craigslist ads for similar items, and the prices charged in your local thrift stores.  (For example, if ITsDeductible offers $10 for a sweater but the store you donated the sweater to tags it $5.99, you're going to have a problem holding up for that $10 value.)

In fact, you may find that a more defensible response is to claim slightly lower values so you get under the $5000 limit, if those values are more supported by your local market.

You may also be in trouble if you have a generic description from the charity "20 bags" or some such.  For a large donation, ideally you will have your own itemized list and you will get someone from the charity to sign it to attest that you donated those specific items on that day.  Otherwise, even with a well-documented list of items and their values, you also need to prove you donated the specific items on that list to the charity (and didn't just make up a list after the fact.)

Ultimately it will depend on the strength of your documents and the discretion of the examiner, whether you donated one group of similar items requiring an appraisal, or several different groups of items.  In the end you have the right to appeal and take your case to tax court if you lose with the examiner.  It will all depend on the quality of your documents surrounding how you acquired the property, how you determined the condition, and how you determined the value.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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10 Replies
TaxGuyBill
Level 9

Why is TurboTax lumping all of my charitable donations into one category?

Did you enter them as separate contributions?
Did you import it all from Its Deductible?

You would need to go through the process of amending to change Form 8283 so it isn't all lumped together (you may need to send that in response to the IRS notice).
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed"...>

Make sure you have the proper receipts from the charitable organizations.
opalfe
New Member

Why is TurboTax lumping all of my charitable donations into one category?

I donate everything all on one day. So I put in the charity and the date and then added the items using Its Deductible. It doesn't matter what I put in it still puts everything under Clothing, Footwear, Accessories &  Household items , even if that's not the correct category.
opalfe
New Member

Why is TurboTax lumping all of my charitable donations into one category?

How would I enter them as separate Contributions?
TaxGuyBill
Level 9

Why is TurboTax lumping all of my charitable donations into one category?

I'm not sure how to do it with Its Deductible, so somebody else may know how to do that.
opalfe
New Member

Why is TurboTax lumping all of my charitable donations into one category?

ok, thank you
mesquitebean
Level 15

Why is TurboTax lumping all of my charitable donations into one category?

What is the correct category?   What kind of items do you have that do not fall in that broad description?

Even if you enter separate contributions to the same (or different) charity on the same donation date, ItsDeductible will still put them in the broad category  "Clothing, Footwear, Accessories, & Household Items" on the Form 8283.

I just did a scenario, and anything I entered in ItsDeductible (even custom items) appears on the Form 8283 as "Clothing, Footwear, Accessories, & Household Items."
Does your donated item not fit into one of those?

You may wish to phone TurboTax Support on Monday for help with your IRS letter.   If you did not purchase Audit Defense, TurboTax has a free Audit Support Center that will help you.   To get the phone number, click the blue "Get Help.." button at the following page and follow the prompts.
<a rel="nofollow" target="_blank" href="https://support.turbotax.intuit.com/irs-notice/audit-support/">https://support.turbotax.intuit.com/i...>
TaxGuyBill
Level 9

Why is TurboTax lumping all of my charitable donations into one category?

@epo39b   The OP wants them into separate categories of items on the 8283, to avoid the requirement for an appraisal.  It seems like if you import from ItsDeductible, the program can't do that.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/instructions/i8283#idm139878107532848">https://www.irs.gov/instructions/i8283#id...>
mesquitebean
Level 15

Why is TurboTax lumping all of my charitable donations into one category?

That's correct.  I confirmed that it lumps it like that in my scenario I tested.   ItsDeductible considers all items to be in that particular group.   What does the IRS consider as "similar items"?     Does the IRS consider an old VCR or kitchenware or a printer to be a similar item to used clothing for this purpose?
Opus 17
Level 15

Why is TurboTax lumping all of my charitable donations into one category?

I have never found a black letter rule or tax court case defining "group of similar items."
*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Opus 17
Level 15

Why is TurboTax lumping all of my charitable donations into one category?

You don't need to amend.  At this point, you need to write a letter to the IRS along with a list of donations or a spreadsheet explaining what you did and why you think the items are in different categories.

(It'sDeductible uses the same category for everything entered via ItsDeductible, that's just the way it is designed.)

The IRS requires that you have an appraisal for any single item "or group of similar items" with a value more than $5000.  There is no black letter description of what constitutes a "group of similar items" and I have not seen any tax court cases on this.  So I really can't tell you whether "used clothing", "used electronics", "use furniture" etc. would be accepted as being different categories, or one category "used household items."

You don't need to amend to change the descriptions, what you need to to is write a letter explaining your argument that you have items of different categories and each category is under $5000.  You will need copies of your documentation; including information about how you acquired the items, the date you acquired them, the condition they were in, how you determined the fair market value, and a receipt from the organization.  All these documentation requirements are listed in publication 526 for donations valued at more than $500 and you will be in a very weak audit position without them. 

"ItsDeductible" values are not likely going to be accepted without some proof that the values used by ITsDeductible (which are generic nationwide values) actually correspond to values in your area. (Other customers have written in that their values were not accepted.)  Proof would include proof of sales from eBay and local craigslist ads for similar items, and the prices charged in your local thrift stores.  (For example, if ITsDeductible offers $10 for a sweater but the store you donated the sweater to tags it $5.99, you're going to have a problem holding up for that $10 value.)

In fact, you may find that a more defensible response is to claim slightly lower values so you get under the $5000 limit, if those values are more supported by your local market.

You may also be in trouble if you have a generic description from the charity "20 bags" or some such.  For a large donation, ideally you will have your own itemized list and you will get someone from the charity to sign it to attest that you donated those specific items on that day.  Otherwise, even with a well-documented list of items and their values, you also need to prove you donated the specific items on that list to the charity (and didn't just make up a list after the fact.)

Ultimately it will depend on the strength of your documents and the discretion of the examiner, whether you donated one group of similar items requiring an appraisal, or several different groups of items.  In the end you have the right to appeal and take your case to tax court if you lose with the examiner.  It will all depend on the quality of your documents surrounding how you acquired the property, how you determined the condition, and how you determined the value.

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

View solution in original post

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