, Answering FAQ'sTurboTax Employee
ItsDeductible helps you track your charitable donations and accurately assign a value for the items you donate.
You enter the items you donate and ItsDeductible calculates the deductible value for similar items in our database. You get the biggest tax deduction for your donations and comply with IRS guidelines.
What are the IRS guidelines?
When you donate an item to a charitable organization, the IRS allows you to deduct the fair market value of the item at the time you make the donation. The IRS defines fair market value as the sale price between a willing buyer and seller, where neither is required to buy or sell, and both have relevant knowledge of the facts.
One method that the IRS recommends for determining fair market value is to check the price of similar-selling items from a variety of sources. See also IRS Publication 526: Charitable Contributions.
How are ItsDeductible values determined?
We valuate items based on fair market value. With ItsDeductible, you have access to fair market values for thousands of commonly donated items. Our extensive research ensures that the values are accurate and comply with the IRS guidelines. And, we update those values every year.
To determine fair market values, ItsDeductible gathers pricing information from auction Web sites (such as eBay), as well as resale outlets and thrift stores across the U.S.
Electronic collection--Each day we collect information from hundreds of thousands of completed eBay auctions. This way, we can capture valuations for items donated to charities that are difficult to find in thrift, consignment, or specialty stores, such as electronics, computers, jewelry, and other higher priced items.
For each item, we perform a statistical calculation to determine the fair market value of the item. We then represent the value as either High, Medium, or Low.
Manual collection--We collect pricing information through manual processes such as surveying thrift and consignment stores across the country.
This combination of electronic and manual pricing allows us to create a comprehensive, up-to-date collection of values based on real-world transactions that comply with IRS guidelines.
What about the Goodwill and Salvation Army valuation guidelines?
Using valuations solely from organizations like Goodwill or Salvation Army is not an accurate assessment of fair market values. Goodwill or the Salvation Army guidelines represent bargain pricing stores and typically understate the true market value.
Although we use prices from Goodwill and Salvation Army stores, we use this to supplement a wide variety of consignment and specialty stores, as well as millions of eBay transactions. This approach is consistent with the IRS guidance to seek prices from a variety of sources.