Tax Tip: Deduct Non-Cash Contributions

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NEW YORK (MainStreet) — Did you clean out your closet last year and donate unwanted clothes and household items to Goodwill or the Salvation Army? If so, you can claim a tax deduction for the “fair market value” of used items donated to a church or charity.  

You are responsible for determining the fair market value of the items you donated. The charity is not required to and in most cases will not provide you with a value. But don't despair, there are online valuation guides you can use, including Goodwill's and the Salvation Army's

If your deduction for “noncash” contributions totals more than $500, you must fill out IRS Form 8283 and provide the following info:

•    Name and address of the charity
•    Date the contribution was made
•    Fair market value of items donated
•    A summary of how you determined the value; for example, “Salvation Army valuation guide”

If any item has a value of more than $500, you must also include this info.:

•    The date you acquired the item
•    How you acquired the item, whether by purchase, gift or inheritance
•    Cost, or adjusted basis, of the item

To deduct a contribution of used clothing or a household item, the item must be in at least "good" condition. And remember, donations of items with a minimal monetary value, such as used socks or underwear, are not deductible.

If you buy items to contribute to a food, toy or clothing drive, you can deduct the actual cost as well.

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