Non-Cash Donations

For those of us who don’t like organizing a yard sale and hassling over a fair price for our precious collection on the Doobie Brother albums, there is always the option of calling the Salvation Army, or a similar not-for-profit organization that will pick up our unwanted items in exchange for a receipt.  The Pension protection Act of 2006 (PPA 2006) includes several provisions that require enhanced recordkeeping of these charitable contributions.

You can deduct the value of used clothing and household items that are in “good used condition or better”.  The IRS has not defined what is “good” and this term always causes interesting conversations with our clients during their tax appointments.

Our recommendation is to use the digital age and take digital photos of the used clothes and household items you are donating and store the photos in your computer.  Also, be sure to get that receipt from the organization you donated your items and be sure that it has the name of the organization, the date and location of the donation and a detailed list of the items donated.  We believe that armed with the receipt, a list of the items and photos of the items you should not have any problems should the IRS ask for support.

So have fun taking the photos – dress up your cat or have your kids model the items.  One last word – don’t include your underwear or socks.  The IRS will have a laugh but disallow that deduction.