Household downsizing and non cash charitable deduction documentation

[ImaCheesehead]

Hi All,

I read the forums just about every day but don't really post - hoping I could get some ideas from those that have downsized their households.

I retired a few weeks ago and DH will follow at the end of 2016. In the meantime, I am going to get rid of most of our stuff so we can be be ready for a new adventure that will not include dragging all these all these possessions behind us for the rest of our lives.

The hassle of a garage sale is not for me, so I want to donate most of the the things we no longer want/need. It will be quite a bit more than I have donated as I cleaned out closets in the past. I want to be very careful to document this properly for my taxes and have done some web searches and see that donations over $500 need more documentation and over 5k need appraisal. My donations in 2015 and 2016 are going to consist of perhaps thousands of small items but certainly nothing that is individually very expensive.

Can anyone who has been involved in something similar tell me how they handled the documentation for the IRS? I was thinking I would take a digital photo of each load and will get a receipt when I drop it off. Should I take a list of each item with an assigned value and have the non-profit organization sign off on that instead? Will they or do they have to list what each item is worth? I cannot imagine taking a SUV full of stuff and have them write out a receipt that includes each individual item. I might be over thinking this but the last thing I want is to have the IRS think I am cheating on my taxes.

Thank you for any suggestions you can offer!

 

[Tailgate]

I can't help but think that the hassle of documenting the giveaways is as painful as having a garage sale yourself. Plus, in most cases, the charity has to turn around and sell your stuff to raise the funds they need, so aren't you just passing the hassle forward?

Anywho...you might consider having the garage sale yourself and donating the proceeds to charity..just a thought.

We are having our second decluttering garage sale tomorrow in anticipation of our downsizing move in 2 weeks. We will probably take in 3k from both sales..nice chunk of change. We're both bone tired from setting up tables, pricing, etc and we are not looking forward to tomorrow's haggling with the public...but by 12noon tomorrow we will be free of a ton of 'stuff' we don't need. We will sleep well tomorrow night!

Good luck Cheesehead!

 

[braumeister]

I've been taking little items to Goodwill for years. They have no interest in the value of the items. If you ask for a receipt, they will give you a blank receipt with their signature, load number, and date, and you will have to fill in all the details yourself -- strictly honor system.

For values, I generally enter the items in itsdeductible which provides an average value for a great many items and you can download that right into your Turbotax return.

For items that aren't possible to value on that site, I make my own estimate. Photos are good, and I keep files of them for several years, but have never been asked to justify my deductions.

 

[ShortInSeattle]

We approximated values in a spreadsheet (estimated low) and snapped photos before dropping off at the donation station. Time saving tip: Snap a photo of a group of things instead of doing individual glamour shots of each pair of trousers.

 

[ImaCheesehead]

Tailgate, that IS a nice chunk of change, but seriously not for me. I would have to store all the stuff I am sorting out until next spring - we don't have garage sales here in WI in the winter I think I am ok donating clothes and household goods because it is a resale store I am taking it to, St Vincent de Paul. Their thing is taking in goods and selling them. Good luck tomorrow!

Braumeister, thank you for the TurboTax Its Deductible idea. Do you recall if you used it for more than $500 of non cash donations in any given year?

 

[ImaCheesehead]

Hi ShortinSeattle- Thanks! Did you then submit the spreadsheet to the IRS in any way - perhaps attaching it to form 8283 or did you just hold onto it? I am not sure if I have to submit that form.

 

[harley]

We've been doing a lot of giving to Goodwill and other thrift store groups over the last few years, what with our own downsizing and having to clear out parents homes after their deaths. I make piles of the clothes or whatever, count the items (estimating the number that are average vs. exceptional), and then take video with my camera to document the stuff. Then I use It's Deductible to determine the value when I do taxes. It's a pain, but it's been thousands of dollars of deductions. I sometimes worry that these huge non-cash deductions will kick off an audit, but I've documented it all as best I could. And so far I've been lucky.

 

[pb4uski]

I've been taking little items to Goodwill for years. They have no interest in the value of the items. If you ask for a receipt, they will give you a blank receipt with their signature, load number, and date, and you will have to fill in all the details yourself -- strictly honor system.

For values, I generally enter the items in itsdeductible which provides an average value for a great many items and you can download that right into your Turbotax return.

For items that aren't possible to value on that site, I make my own estimate. Photos are good, and I keep files of them for several years, but have never been asked to justify my deductions.

+1 I just use my best estimate and take my chances and have never been questioned.

 

[ERD50]

Like many others here, I do my best to assign a reasonable value to each item we donate (mostly Goodwill). The program and on-line sources seem way high to me, I usually take the lowest value. I figure that will look good if I ever were to get audited. And partially, because we almost always came close to the limit where you need added documentation ($500, IIRC?), so I just let it go.

But I was surprised to hear from some one who hires a pro to do their taxes. They said it went like: " You gave a bag of clothes to GoodWill? OK, $100 value, Next..."!

I explained to them that that just ain't the way the regs are written, you need some determined value (thrift store, etc). But I suppose the pro figures the odds of an audit are slim, the odds of them questioning that particular item in an audit are slim, and if they did, they might deny it, and they would owe maybe $15-$25 (and probably no fine for a small issue?). A calculated risk. I wish I could bring myself to be that causal, but I can't.

-ERD50

 

[braumeister]

Braumeister, thank you for the TurboTax Its Deductible idea. Do you recall if you used it for more than $500 of non cash donations in any given year?

Yes, for several thousand dollars in some years.

 

[NgineER]

We have decluttered and donated non-cash items over $1000 each year for the last four years at least.

We write the number of items down on a piece of paper and attach it to the blank goodwill receipt. We tend to only bring a car load at a time, so we tend to have many receipts each under $500 in total. We use the turbo tax built in feature to estimate value of the items. We have never been audited and keep good records, but no pictures.

 

[RE2Boys]

Hi ShortinSeattle- Thanks! Did you then submit the spreadsheet to the IRS in any way - perhaps attaching it to form 8283 or did you just hold onto it? I am not sure if I have to submit that form.

If your total of all noncash donations exceeds $500, you must submit IRS Form 8283 with your tax return. You do not need to submit any backup unless your required to submit an appraisal for a noncash item valued at over $5000.

It's your responsibility to justify the deduction when asked so what documentation you feel is adequate is up to you, & takes your chances. The higher the claim, the more likely an audit if it would make an appreciable difference in your tax return.

Remember that the tax advantage is only that part of your itemization that exceeds your standard deduction.

 

[Dog]

We have been clearing out closets and rooms the past two years. This winter I will tackle the attic and furnace room and most likely donate the stuff. Doubtful it will be an IRS concern. Need to paint and upgrade a few things to prepare the house to sell in the Spring. Have some nice gently used cherry wood furniture (dining room set, buffet and grandfather clock) we will sell on Craigslist as well as some Stiffel lamps and Waterford crystal. My tastes have changed dramatically over the years. I much more casual these days . It will be nice to simplify our life down to one home!


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[ImaCheesehead]

FANTASTIC information - thank you everyone!

I will combine a few methods - take a photo and then add the items by date as I go along to It's Deductible. I will make a note on the blank receipt of the total and hopefully can print from It's Deductible to attach to the receipt was well. In the end I will file 8283 with my taxes. Whew!

I think it will take a bit of time but it's worth it to have things go to charity rather than tossing and what the heck, I have nothing but time - I am retired

 

[athena53]

For things charities don't want or need, we've had great luck listing them on Craigslist under Free Stuff and putting them at the end of the driveway. We're pretty careful not to donate things that need repair, have no practical value (20 empty canisters left form some very fine Scotch whisky!), or that charities don't want (leftover tile and grout- our local Habitat for Humanity wasn't interested).


You won't get a deduction but you still get the satisfaction of seeing them go to someone who has a use for them. Another example: we had some very well-built wood chairs with caned backs that needed repair and cushions that had been patched with duct tape in places. Put them on Craigslist and they disappeared.

 

[harley]

FANTASTIC information - thank you everyone!

I will combine a few methods - take a photo and then add the items by date as I go along to It's Deductible. I will make a note on the blank receipt of the total and hopefully can print from It's Deductible to attach to the receipt was well. In the end I will file 8283 with my taxes. Whew!

I think it will take a bit of time but it's worth it to have things go to charity rather than tossing and what the heck, I have nothing but time - I am retired

If your camera can do video, I would suggest using that when you document the items. It's handy to be able to talk about what you're giving. Hearing it during playback makes it easier to remember the next April (if you're a procrastinator like me). I just pan across the pile, making comments as needed. Technology is sweet!