Chartible contribution

Forum|Forum|3 years ago
November 16, 2022
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Have donated a recumbent trike to a charitable organization. Bought the item new, know the price, and duration since purchase. How do I determine the value to be used for the filing? And since I travelled to the location getting the item are any travel expenses deductible?

emina

Level 5

Hi, happy to assist!

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.

Determining the value of donated property would be a simple matter if you could rely only on fixed formulas, rules, or methods. Usually it is not that simple. Using such formulas, etc., seldom results in an acceptable determination of FMV. There is no single formula that always applies when determining the value of property.

This is not to say that a valuation is only guesswork. You must consider all the facts and circumstances connected with the property, such as its desirability, use, and scarcity.

For example, donated furniture should not be evaluated at some fixed rate such as 15% of the cost of new replacement furniture. When the furniture is contributed, it may be out of style or in poor condition, therefore having little or no market value. On the other hand, it may be an antique, the value of which could not be determined by using any formula.

Here is the IRS reference link that has more details on the subject: Determining the Value of Donated Property

When it comes to mileage, here is some additional info:

Do you donate your time to charity? If you travel for it, you may be able to lower your taxes. Here are some tax tips that you should know about deducting charity-related travel expenses:

• Qualified Charities — To deduct your costs, you must volunteer for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are generally qualified, and don’t need to apply to the IRS. Ask the group about its status before you donate. You can also use the Select Check tool on IRS.gov to check an exempt organization’s status.

• Out-of-Pocket Expenses — You may be able to deduct some of your costs including travel. They must be necessary while you are away from home. All costs must be: o unreimbursed, o directly connected with the services, o expenses you had only because of the services you gave, and o not personal, living or family expenses.

• Genuine and Substantial Duty — Your charity work has to be real and substantial throughout the trip. You can’t deduct expenses if you only have nominal duties or don’t have any duties for significant parts of the trip.

• Value of Time or Service — You can’t deduct the value of your time or services that you give to charity. This includes income lost while you serve as an unpaid volunteer for a qualified charity.

• Travel You Can Deduct — The types of expenses that you may be able to deduct include: o air, rail and bus transportation, o car expenses, o lodging costs, o cost of meals, and o taxi or other transportation costs between the airport or station and your hotel.

• Travel You Can’t Deduct — Some types of travel don’t qualify for a tax deduction. For example, you can’t deduct your costs if a significant part of the trip involves recreation or vacation.

For more on these rules, see Publication 526, Charitable Contributions. You can get it on IRS.gov/forms at any time.