October 4, 2007
Typical Tax Rules for Non-Cash Donations to Charity
When most people consider charitable giving, they think of giving money. However, you can also make charitable donations of non-cash items. This can include almost anything that you have around your home, including clothes, household appliances, and even cars can be used by charitable donations. Here are some of the rules to follow when deciding on non-cash donations to charity.
First, you need to figure out whether or not the items that you are thinking of giving away are actually useful. Many charities will only be able to use your items if they are new, unused, or nearly new. It is a pretty safe bet that if your couch is tattered and stuffing is coming out of it or if your washing machine is rusty and on its last legs the charity is not going to need it. The same thing goes for timeshares that were a bad investment for you. Depending on the charity, some will need your used car to actually be running in order to accept it, while others will take non-working ones. If you are not sure about your items, you can try calling around to different charities and see what items they accept for donations.
If your items are useful, you might consider selling your items and then donating the money that you make. Cash is a lot easier for charities to use for a variety of purposes. You also help to eliminate the for-profit middleman that can take a cut of the proceeds that you wanted your charity to receive. You also save the charity the time and money of either selling the item themselves or refurbishing it. It also makes it easier on you come tax time, since you have an exact value to put down instead of estimating what your item was worth. There are a variety of places that you can sell items or place ads, including EBay, your local newspaper, and Craig’s List. If you have several items, or know multiple people who might be interested in supporting the same cause, you can consider partnering with friends or family and hosting a multi-family sale to benefit your charity. Advertising the cause that you are supporting may also help you to get higher offers on items at the sale – for instance, put up signs saying that all the proceeds will go to breast cancer research or the local animal shelter.
If you decide that you do not want to sell your items and or the items themselves may be useful to the charity, you will want to try and find the right charity. The best thing to do is to start looking locally. Shipping or transportation costs will lower the value of your donation, so going local is the best way to get your money’s worth. Ask friends and neighbors about charities that they know of, or simply go down your phone book and call around to see what items local charities will accept. If they do not take the items that you have to offer, they may be able to point you in the direction of a charity that does. Another option is to use an online search engine to find charities that work in your area.
Whatever you decide to do with your items, it is important to get a receipt, particularly on higher-value items, if you want to use your donation as a way to qualify for tax exemptions. Larger groups, like Goodwill and the Salvation Army, will give you receipts for donations larger than a value of $1000. You will then need to save all these receipts for tax time so that you can properly itemize your charitable donations.









































