Charitable Donations And Fair Market Value

Written by Rylee Newton
Bookmark and Share

If you donate goods to a charitable organization and you plan on writing off the donation, you need to determine the fair market value for your items. In simple terms, fair market value is an estimation of the price your goods would fetch if you sold them at the time of the contribution. This figure is determined in a number of different ways, depending on the type of goods you donate.

When estimating the fair market value for your donation, it's important to be accurate. If you assess your property at a higher value than it's actually worth, you run the risk of being audited by the IRS. Many charitable organizations provide information and additional resources to help you determine the fair market value of your goods.

Determining the Value of Charitable Goods

If you're writing off smaller items like clothing, books, and household items, the donation center can estimate the value of your goods for you. If your donation amount exceeds $250, you need to get a receipt from the charity and maintain it for your records. If the value of your property exceeds $500, you may need to fill out IRS Form 8283, and attach it to your tax return.

When determining the fair market value for larger items such as cars, trucks, RVs and boats, you can consult a “blue book” to find a price for the make, model and mileage of your vehicle. If you donate a vehicle or other large item with a value of more than $5,000, you need to get a professional appraisal. In some cases, the fair market value of your donation is determined by the price the charity sells your items for.


Bookmark and Share