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Donation Value Guide

Offline Alias300

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Donation Value Guide
« on: February 04, 2013, 01:06:03 AM »
Since taxes are on our mind and we all have plenty to donate......

TurboTax Free ItsDeductible tracker:

http://turbotax.intuit.com/personal-taxes/itsdeductible/
(Great tool!  Estimates values higher than I suspected. One of the few calculators where you can add items not on list and add own Fair Market Value (FMV) from other sources; like eBay. Prints itemized list or imports straight to tax forms)

Salvation Army's Value Guide

http://www.use.salvationarmy.org/use/www_usn20.nsf/vw-text-dynamic-arrays/33CE09196410A2148825770B0054FF7A?openDocument&charset=utf-8

IRS Guidelines

http://www.irs.gov/pub/irs-pdf/p561.pdf

Offline rulesforrebels

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Re: Donation Value Guide
« Reply #1 on: February 04, 2013, 10:18:23 AM »
good info thanks for posting

Offline Alias300

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Re: Donation Value Guide
« Reply #2 on: February 04, 2013, 03:52:57 PM »
Anyone use the NEAT Scanner or something simular?    Reviews?  Pro's/Con's?

Offline Alias300

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Re: Donation Value Guide
« Reply #3 on: February 05, 2013, 08:31:46 AM »
Anyone know about charitable donations 'carry over' rule with he IRS?

I'm reading it as; you can deduct up to 50% of your Adjusted Gross Income (AGI).  If I donate goods equaling >50% of my AGI, I can carry over donation value into following year.

So in 2011 I made $100,000.   I allowed to deduct up to $50,000 in donations.
I donate $75,000 in goods.  So I write off $50k on 2011 taxes.  Then 'carry forward' $25,000 to write off on 2012 taxes?

And donations can be deducted anytime ("carried over") in any of the following five years?



Offline Cobia

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Re: Donation Value Guide
« Reply #4 on: February 05, 2013, 10:44:33 AM »
Anyone know about charitable donations 'carry over' rule with he IRS?

I'm reading it as; you can deduct up to 50% of your Adjusted Gross Income (AGI).  If I donate goods equaling >50% of my AGI, I can carry over donation value into following year.

So in 2011 I made $100,000.   I allowed to deduct up to $50,000 in donations.
I donate $75,000 in goods.  So I write off $50k on 2011 taxes.  Then 'carry forward' $25,000 to write off on 2012 taxes?

And donations can be deducted anytime ("carried over") in any of the following five years?

I will have to ask my accountant about that!

Offline Alias300

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Re: Donation Value Guide
« Reply #5 on: February 06, 2013, 11:02:54 AM »
Please do and post answer.

Have donations this year that won't change much if I deduct them.  Hoping I can use them on next years return.

Offline Alias300

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Re: Donation Value Guide
« Reply #6 on: February 08, 2013, 06:55:22 AM »
Sorry.   I'm not sure if your post is  a statement or if your asking a question?   Can you clarify?


Generally, Donation Value Guide will be calculated on the basis of deduction.



I have no idea what his means..........

Offline Alias300

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Re: Donation Value Guide
« Reply #7 on: February 08, 2013, 10:14:07 AM »
Every item is inventoried, value based on IRS guidelines and I even take pictures.

And really,  my income bracket and low level of deductions?   No red flags. 
An audit on me would take all of 15 minutes.  Pretty straight forward return.

Taxes are done with complete honesty in my house.  I'd rather over pay a bit rather than risk it.....

Offline Alias300

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Re: Donation Value Guide
« Reply #8 on: February 08, 2013, 11:09:04 AM »
Ahhh, I see.

Yeah, if it was all donated goods you might have some flags.

The 50% is total donations.   Like campaign contributions.  Even then, your right.  50% is high for your average person. 


You and I might get away with it if it was only every few years.   We build up items, then donate.
Do it every year? Might raise an eyebrow or two. 


The tough deduction is medical mileage.   You have to be so diligent on your record keeping.  Where, when, why, how far, cross referenced with bill.....
Only reason I like co-pays.   Can write all the info on back of receipt.


Offline Bryan

Re: Donation Value Guide
« Reply #9 on: February 11, 2013, 10:32:56 PM »
Anyone know about charitable donations 'carry over' rule with he IRS?

I'm reading it as; you can deduct up to 50% of your Adjusted Gross Income (AGI).  If I donate goods equaling >50% of my AGI, I can carry over donation value into following year.

So in 2011 I made $100,000.   I allowed to deduct up to $50,000 in donations.
I donate $75,000 in goods.  So I write off $50k on 2011 taxes.  Then 'carry forward' $25,000 to write off on 2012 taxes?

And donations can be deducted anytime ("carried over") in any of the following five years?

Yes, it is true that the max that you can deduct is 1/2 of AGI.  And yes, the remainder does carry over to the following year.  There is actually a line for that on the tax form. 

(And, in 18 years of preparing income tax returns for people, I think I put something on that line about half a dozen times.  It is not very frequent, and all but two of those times, it involved someone who had an unusually low income for just one year.  And one was a senile old lady who just gave away most of her belongings to her church one year.)

Anyway, the bigger issue is the documentation you have to do to make a donation of goods that large.  For donations of a few hundred dollars or less, the IRS will pretty much just take your word for it.  Plus, one of those blank receipts that Goodwill or SA or St Vinnies gives you.  For donations totaling over $500, they want more documents.  They will want to know where and when you got the items, and what means you used to value them.  And, for donations totaling over $20,000 (unless they changed that number recently) they will want you to get an appraisal of the items and what they are worth. 

One other thing you (and others who are reading and make smaller donations) will want to keep in mind.  The deduction is limited to the LOWER of the BASIS or of the FAIR MARKET VALUE of the items donated.  Example: You purchase a locker for $100 and find that the only unmarked box in the unit contains $1500 worth of tools.  You decide to donate the tools to charity.  Your deduction is limited to the $100 that you paid for the tools (your basis) and not the $1500 FMV. 

Also, for those looking in, you cannot make a double deduction.  On your Schedule C form for the business, you count the sale price of the goods you sell as income.  You deduct from that what you paid for the lockers, as well as your business expenses.  Here's where the double deduction comes in:  If you already deducted the whole cost of your purchased lockers on your business form, your tax basis in the items donated from that locker is now zero, and you cannot deduct their cost again when you donate them to charity.  So, yes, I take a lot of stuff to my local St Vincent dePaul for "recycling".  But I can't generally deduct that on my Schedule A because I have already deducted the cost of those items when I deducted the cost of the storage locker purchase on my Schedule C. 

(And yes, as someone who has one Schedule C for an accounting business and another smaller one for a business buying stuff at auctions and selling it on eBay, I have been audited on that issue.  Good record keeping is worth its weight in gold when that happens!)

So, yes, you can do the carryover.  But I would probably worry more about having your other ducks in a row. 

Bryan

Offline Alias300

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Re: Donation Value Guide
« Reply #10 on: February 12, 2013, 10:58:46 PM »
So say I donate goods ten times this year to goodwill. Each donation is $100 of goods.  Total=$1000.

Do I need to keep records of where I got items and cost?   Or is $500+ in ONE donation trip.




And can I write off donations made in my name?   

Offline Bryan

Re: Donation Value Guide
« Reply #11 on: February 13, 2013, 12:57:17 AM »
So say I donate goods ten times this year to goodwill. Each donation is $100 of goods.  Total=$1000.

Do I need to keep records of where I got items and cost?   Or is $500+ in ONE donation trip.

Yeah, the IRS wants you to file a Form 8283 with your tax return if the TOTAL non-cash donations for the year is over $500.   Putting over $500 on the line for non-cash deductions and not including a Form 8283 guarantees a letter from the IRS looking for an explanation. 

I get some people who make that monthly trip to Goodwill or wherever.  On the Form 8283, we list each donation, but a lot of them are "clothing & household goods" or similar.

Usually, if we are talking about a typical person donating stuff, it is worth less now than what they bought it.  The IRS knows this.  So I buy a shirt for $30 at the store and wear it for a year.  Now it's out of style so I donate it.  I figure the thrift store will sell the shirt for $5, so that is the FMV and thus my deduction.  No, I don't need the receipt saying I paid $30 for the shirt.  And on the form, when it asks for WHEN I make the purchase of the 5 shirts in the bag, I will put "VARIOUS" since that is the case and it's pretty clear that my basis (what I paid) is bigger than the current FMV anyway.  (And on the line for "Method used to determine FMV" -- most of us use "Thrift Store Value" for that.)

However, if the monthly $100 donations are from the junk from a locker bought every month, then it would be appropriate to put down the date and amount of the purchase, again subject to the issues in my  other post.

And, yes, you could donate the stuff from the storage locker and put down on the form that it was stuff you originally purchased for personal use.  You could put down anything you want on the tax form.  You could inflate the value of the donation.  But I personally try to avoid the temptation to cheat on tax forms.  Just in case someone was thinking of going there.......



And can I write off donations made in my name?

Nope.  The person who actually made the donation deducts the donation, since it was their money.  Unless they give you the money and you make the donation.  But you kinda knew that, didn't you??  ;D

Offline Alias300

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Re: Donation Value Guide
« Reply #12 on: February 13, 2013, 10:00:39 AM »
Yeah, but I was hoping that know that there is someone here with greater knowledge you might know a loophole or two.   ;D

My father was an accounting fraud investigator (not income tax).  His thing is finding theft from you, not if your cheating your taxes.  Some cross over but not to many people/business owners skim funds or cheat on their taxes then hire a forensic accountant to go over their books..... 

 He's good but years retired and not up to date on current codes.   


Thanks for the info on the 8283.   I've never been auited by IRS but never knew how detailed they wanted it filled out.    Like I said, my income vs deductions isn't something that would raise question. Pretty straight forward returns.    Next year is going to be more work.   Paying own health insurance (COBRA) and surgery in future so co-pays, mileage, medication......
Unless something changes financially I'm probably going to have more deductions than income.  That's going to raise some eyebrows.....and the reason behind my questions of carrying forward donation to future years.


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