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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.
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