If you are selling a lot of items like this, I would think that you could make more money if you took the items out one by one and photographed them, then sold them individually.  You would make more than if you sell the entire contents as one lot.  This is especially true for the art pieces that you mention.

Most of the folks you will find here are buying the whole locker through the storage company, then selling it piece-by-piece to earn a profit.  You would make the most by doing the same.

Which brings us back.....

Buy a unit for $100.   Make $200 in sales.  $100 profit.

Donate the rest......how much do you write off?

Technically, you allocate the $100 cost of the items among the items you bought in the locker, in direct relation to their relative value. 

Your $100 locker has 3 items in it, one you can sell for $500, one you can sell for $300, and one you can sell for $200.  You will allocate the cost for each at $50, $30, $20.

If we're talking $100,000, then you will need to sit down and allocate the costs among the items.  If we are talking about $100, it's OK to make a good guess, or even just write off the whole $100 for the big items and make the little stuff worth $0.  Cuz at that level, if you're really going that it's not worth the time to figure it out, then it won't make that much difference anyway.

The IRS is hip to any reasonable allocation, as long as you don't use that rule to take advantage of them.

Bryan

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?? 

ROI is an interesting concept, in that there is the return on our money, but also the return on our time.

Yes, If I make a dollar on a lot that I purchase, it is much better than losing money on the transaction.

On the other hand, if I wake up this morning and go to work and don't make $150 today, then arguably it might have been a good day to stay in bed. 

Of course, it's hard to generalize like that since I don't know whether there is anything good to buy at the auction today, and we can't buy and sell the same day usually.  And..... some days you make a thousand and some you make nothing.  But it's not worth my time to do this if I can't make more than pocket change doing it over the long haul.

Yeah, but now that I'm semi-retired, I CAN go to the auction just cuz it's fun, right?   

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