Cleaning Out Your Closets?
New deduction rules
for donating used items
It used to be that you could take all your unused
clothing and household items to the local Goodwill, Salvation Army, or
thrift store and reap a nice charitable contribution deduction. All you
needed was a receipt stating the fair market value and the deduction was
allowed.
The rules have changed for any donation of noncash
items to charitable organizations after August 17, 2006.
A charitable contribution deduction of clothing or household items will
only be allowed if the item is in good used condition, or better, and you
have a receipt. The IRS can deny a deduction for any item that has little
monetary value.
The IRS is expected to release guidelines regarding
the definition of "good condition." In general, it would be a good
idea to write "good condition" next to each listing on your list of
donated items.
There is an exception for single items that have a
value of more than $500 and for which you have a qualified appraisal.
