Many of us make donations to Goodwill of clothing, appliance and other miscellaneous household items. Typically as you are dropping off the items you get a Donation Receipt from Goodwill. If you look closely at the Donation Receipt it tells you, “To obtain your Tax Receipt, please register your donation at www.GWdonate.org. You will need to enter the donation receipt ID Number listed above” (on the Donation Receipt).
To have actual substantiation of your donation you need to obtain the Tax Receipt from the Goodwill Website. As part of the process it will allow you to list out your donation and the estimated fair market value of the items donated
If your noncash gift is more than $500 you will be required to attach Form 8283, Noncash Charitable Contributions to your tax return. Noncash gifts over $5,000 require a qualified appraisal for tax purposes that will include the appraiser signing Form 8283 along with a representative of the charity. Gifts of a motor vehicle, boat or airplane over $500 require a Form 1098-C.
Below are other specific rules related to noncash donations:
You can't take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. You can take a deduction for a contribution of an item of clothing or a household item that isn't in good used condition or better if you deduct more than $500 for it and include a qualified appraisal of it with your return.
The fair market value of used household items, such as furniture, appliances, and linens, is usually much lower than the price paid when new. These items may have little or no market value because they are in a worn condition, out of style, or no longer useful. For these reasons, formulas (such as using a percentage of the cost to buy a new replacement item) aren't acceptable in determining value. You should support your valuation with photographs, canceled checks, receipts from your purchase of the items, or other evidence. Magazine or newspaper articles and photographs that describe the items and statements by the recipients of the items are also useful.
As always be sure to maintain good records of your donated items if ever needed for substantiation.
- Jake M. Bodenheimer, CPA