Donating old or unused clothing to a charitable organization is an easy way to get rid of unneeded items. Many non-profit organizations, churches and associations are willing to take your old clothing in exchange for a tax receipt representing the estimated value of the items. This receipt may help reduce your taxable income, resulting in less tax liability. To ensure proper valuation and back-up documentation, a tax donation list should be compiled and attached to any receipt or applicable tax forms.
Compiling a tax donation list can be as simple as a handwritten list of items on a sheet of paper, as long as important details are included. Basic list information should include a description of the item, statement of condition and estimated value. A more detailed item description might include date of purchase, size, style, fabric or materials used. For large or complicated lists, consider entering the information into a computer spreadsheet or word processing program to help with organization, then print the list for storage with tax records.
Proper identification and documentation of clothing donations can be an important step in preparing a tax donation list. For example, a donation list that shows a blouse with a value of $150.00 might trigger an audit or further explanation. But, a description that shows the item as being tailor-made, by a famous designer, made of expensive fabric or decorated with jewels could explain the high valuation and eliminate further need for explanation.
Valuation of donated items of clothing can vary, depending on the receiving organization and who is making the valuation. Clothing owners may naturally wish to place a high value on items in an effort to recoup as much of the purchase prices as possible, no matter the actual market value. Utilizing a common market or published value will give credibility to the list and can help avoid future questions about the item. While the IRS offers some guidelines for valuation, many charities can also offer help with this step in the donation process.
As with most tax-related issues, supporting documentation can often help answer questions or resolve problems with donated clothing deductions. Supporting documentation can include original purchase receipts, warranty or insurance valuations, pictures of the item or even newspaper ads showing the item and a sales price. Some information on how you arrived at the valuation at the time of donation can also be helpful in the future. All of this information should be attached to the tax donation list.
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