Done this for years but never liked how I did it. I get that this is driven by the IRS but Intuit help does not even align with their own product. Their help section says the most common way to assign value to charitable donations is "fair market value". Sounds great, but when entering charitable donations (items) into TT, FMV is not one of the offered means to assign value.
Based on this list I'm never sure which one to use. Is it critical? I'm sure it's not but my OCD brain wants to always do this correctly.
A couple of scenarios:
Needed to get that off my chest...but interested on what other folks do.
Thanks
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Well, I learned today that "present Value" is NOT the right answer. So I'll ask more broadly, when something is purchased new and directly donated, what method should be used to asses it's value based on the list that's provided within Turbo tax (in the OP).
Thanks
You're on the right track, for sure! You could use 'Comparative Sales' for something brand new donated, as well as 'Present Value' (which could equate with FMV).
I use 'thrift shop value' mostly, for used items donated to Goodwill, Salvation Army, etc. For instance, I know they sell t-shirts for $2-5 there.
It's definitely not an exact science; as long as you can verify how you arrived at a certain value (if the IRS asks).
Here's some donation guides from Salvation Army, Goodwill and the IRS to help you.
here are some suggestions from the iRS instructions for the tax form 8283
the FMV.
Examples of entries to make include “Appraisal (only if needed),”“Thrift shop value” (for clothing or household items), “Catalog” (for stamp or coin collections), or “Comparable sales” (for real estate and other kinds of assets). See Pub. 561
https://www.irs.gov/pub/irs-pdf/p561.pdf
what the iRS is asking is how did you get to the valuation
sometimes there are alternative methods
in IRS PUB 561 it mentions 3 methods for valuing donated real estate.
for the animal food donated immediately to charity - - even replacement cost new would be ok.
Turbotax does not know what you donated even though you might enter books.
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