New non-cash charitable donation rules
This entry was posted on 12/18/2006 9:26 PM and is filed under uncategorized.
According to the IRS: "To be deductible, clothing and household items donated to charity after Aug. 17, 2006, must be in good used condition or better. However, a taxpayer may claim a deduction of more than $500 for any single item, regardless of its condition, if the taxpayer includes a qualified appraisal of the item with the return. Household items include furniture, furnishings, electronics, appliances, and linens."
I see two changes here. The IRS or more accurately Congress, dropped the appraisal requirement down to $500 from $5,000 effective August 18th. They also added the phase, "good used condition or better", to the average non-cash donations situation. The second change is in the subjective area.
The recommendation for non-cash donations totaling less than $500 a year is to make an itemized list of them including each item's fair market value. Get some type of a dated receipt from the donee organization, they often will not value them for you. List the total on line 16 of the 2006 schedule A. Do not include your list with your return, keep it in case you need it some day.
