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How to Determine Donation Amounts on Taxes

Donation Amounts Must be Reasonable and Verifiable

1.

Consider the donated property's desirability, use, and scarcity when calculating value. Donated old furniture, paintings, or vehicles can be worthless or worth a fortune depending on the market value. Age does not necessarily define value or worth. If you donate household goods, they must be in good condition or better. If you wish to declare donated goods worth more than $500, the IRS requires a formal appraisal before accepting the deduction's value. Donated jewelry and gems almost always require an appraisal.

2.

Utilize tools to compare prices. To determine fair market value for many items, you can use websites such as eBay.com to compare your items to similar items. This will give you an idea of what buyers are willing to pay. If your donation is a vehicle, the Kelley Blue Book can help you determine its worth. Some websites offer interactive calculators to help determine the fair market value. If you are using an online calculator, be sure the information is current with the IRS guidelines

3.

Obtain written receipts. The IRS requires receipts for all qualified donations. When donating property, ask for a signed receipt from the organization. The receipt must include the organization's name, date of donation and value of property. When charities determine the estimated value, they generally set the value at 15 percent to 25 percent of the original worth.



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