Just started working on our 2013 taxes, wanted to get an early start due to selling the house, donating tons of stuff, trading our truck in (business asset) for a bigger truck and just trying to see how much of our paperwork is still catching up with us due to a new address.
I spent several hours using It's Deductible and browsing thrift stores to determine reasonable values on the items we donated. When you add up all those values, it's a pretty large sum of money. Part of our initial reaction of seeing the valuation of all the items at used prices, was "Is that all?" when we thought about the thousands and thousands we spent on all that "stuff". Right after that thought, came the thought that it's still a large amount to be reporting as charitable contributions on our income tax which raised a concern in my mind that it could be an IRS flag. I feel like it's totally legitimate and could be easily supported, could probably even have a higher amount if I used the higher end of the It's deductible values.
Any real world experience for those of you who did this in the past? Did you ever have any issues with the IRS on the value of all that stuff you donated?
Lucky Mike said
07:40 PM Jan 23, 2014
I always requested a valuation receipt from the Non-profit I donated it to.......never had a problem even during audits from the IRS as long as there was a good paper trail
Neil and Connie said
07:45 PM Jan 23, 2014
We didn't have any issue; but I had a receipt from each pickup (mostly Am Vets) and attached an Excel printout with description and value for each item. I got the values from ebay and craigslist; as long as you don't overvalue things the IRS likely won't give you much trouble. For instance, I valued hardcover books donated to the library at 1 or 1.50 and paperbacks at .75; if you valued hardcovers at 5 bucks they might look a little askance at that; although that might be a fair valuation if you could defend it. We ended up with about 6,000 or 8,000 extra in charitable deductions on our 12 taxes. I figured that at worst the IRS would dispute the values and maybe knock the number down a bit but I tried to be as fair as I could be. Mostly what the IRS is looking for is can you justify the deduction…and is the valuation reasonable. Given the low number of audit personnel and the shrinking number of audits resulting from that…it's not really cost effective for them to spend 3 days going over your list to get another 100 bucks in taxes.
Of course…I'm not a tax lawyer or accountant so YMMV, don't fold spindle or mutilate and do not remove this tag under penalty of law.
NWescapee said
09:48 PM Jan 23, 2014
Thanks for the input, I even got a chuckle or two out of the responses. I have really good records so I'm not worried that it can't be substantiated, quite frankly I just don't want the hassle. This life on the road has it's own pleasures and stresses and I'm finding way more pleasure and fun than the stress with a S&B, just not wanting the IRS to break my "bubble"!! I have my receipts with lists for each pick up or drop off, just was concerned that the $$'s might be perceived as higher than average. But then again, anyone who goes into this lifestyle might not be considered "average" or maybe "normal"!!
WestWardHo said
03:55 AM Jan 24, 2014
Ruth,
Jesse is sleeping right now (it's 2:41 AM - one of those 'my mind won't stop' nights) or I would ask him for specifics but I know he uses online donation calculators, I believe the IRS has one and also the Salvation Army but sleeping guy is the repository of that information. A Google search should pull up a couple to back up your receipts.
Because we combined two households a couple of years back we had a big charitable deduction plus some major medical deductions in one year. All well documented on our professionally prepared return. The IRS didn't blink but we don't know if that's just luck. We are going to do it again for 2013 sans the medical deductions but all well documented if we're questioned. None of us want to be audited but since you've covered yourself with those receipts it's legitimate and legal and as Neil and Connie say, not much to loose.
The thought of an IRS audit used to terrify me back when I didn't keep such good records and was self employed but today I don't sweat it. I'm guessing but truly don't know that I think they'd have to keep transferring your case to an office near where you are if you were called?
Sherry
Jake62 said
08:03 AM Jan 24, 2014
Since I don't know your AGI for 2013, I've copied the IRS Reg. But basically, let's say your filing "married joint." You can fully deduct your contributions up to when your AGI hits $300,000.
Let's say your AGI for 2013 was $50,000. Then there are only two requirements to meet. If your charitable contributions were "less than 20%", $10,000, then there are no other tests. If your contributions are in excess of $20%, you need to read more of this section (too long to put it all here but see below.)
You are also limited to "50%" of your AGI, $25,000, if your AGI was $50,000.
Also, I've use "It's deductible" via Turbo Tax for a long time and have never had a problem. Since we downsized coming from Tucson to DC in 2012, we got rid of "lots" of stuff and our charitable contributions were substantial, especially to Good Will, Gospel Rescue, & Salvation Army. No issues on my taxes.
Limits on Deductions For 2013, the total of your charitable contributions deduction and certain other itemized deductions may be limited if your adjusted gross income is more than:
$150,000 if married filing separately,
$250,000 if single,
$275,000 if head of household, or
$300,000 if married filing jointly or qualifying widow(er).
This is in addition to the other limits described here. See the instructions for Schedule A (Form 1040) for more information about this limit.
If your total contributions for the year are 20% or less of your adjusted gross income, you do not need to read the rest of this section. The limits discussed in this section do not apply to you.
The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income. Your deduction may be further limited to 30% or 20% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. A higher limit applies to certain qualified conservation contributions. These limits are described in detail in this section."
There's more to this cite which you can read here:
i was a tax preparer in my previous life lol, and we also had large contributions the year that we sold our home.
As a preparer I told my clients to keep good records, and photos if possible. We had a spreadsheet that I listed items on showing original value (as close of an estimate that I could get) and then thrift value. There is a table on the IRS website that you can get thrift values for most items. I only had 1 client get a letter from the IRS in 10 years for their contributions, and I always advised my clients if they had the records to back it up then do it.
I used tax act the year we did ours, and it had values for contributions in the program. The IRS will make you list the items when your items exceed $500, so it can be time consuming, but group like items together.
Good luck!
Karen
Camper Chronicles said
08:15 AM Jan 25, 2014
Great post. I donated large sums to the homeless shelter and library this year. The library gave me a signed form and left the amount blank so I could fill it in. I have a hand written sheet and the Good Will price sheet as a back up for the books I donated. The homeless shelter sent a letter thanking me for the generous donation.
My backup was a hand written count sheet on the number of sheets and blankets etc. nothing fancy but since I don't show a pattern of maxing our charitable donations and can e plain with. Major house downsizing I figure I should be ok. It seems like a lot to is but we are small potatoes to the government froma revenue standpoint.
Talensnana said
10:19 PM Feb 3, 2014
I am starting the process of cleaning out the house in prep for fulltiming. Never even thought about keeping a list or worrying about the deduction. I guess I should. In the past I would donate a little here or there and did not ever think it was worth the effort. When you talk about getting rid of 80 percent of your belongings, it is worth it. Thanks for the information.
Just started working on our 2013 taxes, wanted to get an early start due to selling the house, donating tons of stuff, trading our truck in (business asset) for a bigger truck and just trying to see how much of our paperwork is still catching up with us due to a new address.
I spent several hours using It's Deductible and browsing thrift stores to determine reasonable values on the items we donated. When you add up all those values, it's a pretty large sum of money. Part of our initial reaction of seeing the valuation of all the items at used prices, was "Is that all?" when we thought about the thousands and thousands we spent on all that "stuff". Right after that thought, came the thought that it's still a large amount to be reporting as charitable contributions on our income tax which raised a concern in my mind that it could be an IRS flag. I feel like it's totally legitimate and could be easily supported, could probably even have a higher amount if I used the higher end of the It's deductible values.
Any real world experience for those of you who did this in the past? Did you ever have any issues with the IRS on the value of all that stuff you donated?
We didn't have any issue; but I had a receipt from each pickup (mostly Am Vets) and attached an Excel printout with description and value for each item. I got the values from ebay and craigslist; as long as you don't overvalue things the IRS likely won't give you much trouble. For instance, I valued hardcover books donated to the library at 1 or 1.50 and paperbacks at .75; if you valued hardcovers at 5 bucks they might look a little askance at that; although that might be a fair valuation if you could defend it. We ended up with about 6,000 or 8,000 extra in charitable deductions on our 12 taxes. I figured that at worst the IRS would dispute the values and maybe knock the number down a bit but I tried to be as fair as I could be. Mostly what the IRS is looking for is can you justify the deduction…and is the valuation reasonable. Given the low number of audit personnel and the shrinking number of audits resulting from that…it's not really cost effective for them to spend 3 days going over your list to get another 100 bucks in taxes.
Of course…I'm not a tax lawyer or accountant so YMMV, don't fold spindle or mutilate and do not remove this tag under penalty of law.
Jesse is sleeping right now (it's 2:41 AM - one of those 'my mind won't stop' nights) or I would ask him for specifics but I know he uses online donation calculators, I believe the IRS has one and also the Salvation Army but sleeping guy is the repository of that information. A Google search should pull up a couple to back up your receipts.
Because we combined two households a couple of years back we had a big charitable deduction plus some major medical deductions in one year. All well documented on our professionally prepared return. The IRS didn't blink but we don't know if that's just luck. We are going to do it again for 2013 sans the medical deductions but all well documented if we're questioned. None of us want to be audited but since you've covered yourself with those receipts it's legitimate and legal and as Neil and Connie say, not much to loose.
The thought of an IRS audit used to terrify me back when I didn't keep such good records and was self employed but today I don't sweat it. I'm guessing but truly don't know that I think they'd have to keep transferring your case to an office near where you are if you were called?
Sherry
Since I don't know your AGI for 2013, I've copied the IRS Reg. But basically, let's say your filing "married joint." You can fully deduct your contributions up to when your AGI hits $300,000.
Let's say your AGI for 2013 was $50,000. Then there are only two requirements to meet. If your charitable contributions were "less than 20%", $10,000, then there are no other tests. If your contributions are in excess of $20%, you need to read more of this section (too long to put it all here but see below.)
You are also limited to "50%" of your AGI, $25,000, if your AGI was $50,000.
Also, I've use "It's deductible" via Turbo Tax for a long time and have never had a problem. Since we downsized coming from Tucson to DC in 2012, we got rid of "lots" of stuff and our charitable contributions were substantial, especially to Good Will, Gospel Rescue, & Salvation Army. No issues on my taxes.
"Per IRS Publication 526, Charitable Contributions
Limits on Deductions
For 2013, the total of your charitable contributions deduction and certain other itemized deductions may be limited if your adjusted gross income is more than:
$150,000 if married filing separately,
$250,000 if single,
$275,000 if head of household, or
$300,000 if married filing jointly or qualifying widow(er).
This is in addition to the other limits described here. See the instructions for Schedule A (Form 1040) for more information about this limit.
If your total contributions for the year are 20% or less of your adjusted gross income, you do not need to read the rest of this section. The limits discussed in this section do not apply to you.
The amount you can deduct for charitable contributions cannot be more than 50% of your adjusted gross income. Your deduction may be further limited to 30% or 20% of your adjusted gross income, depending on the type of property you give and the type of organization you give it to. A higher limit applies to certain qualified conservation contributions. These limits are described in detail in this section."
There's more to this cite which you can read here:
http://www.irs.gov/publications/p526/ar02.html#en_US_2013_publink1000229804
Good luck!
Hi Ruth,
i was a tax preparer in my previous life lol, and we also had large contributions the year that we sold our home.
As a preparer I told my clients to keep good records, and photos if possible. We had a spreadsheet that I listed items on showing original value (as close of an estimate that I could get) and then thrift value. There is a table on the IRS website that you can get thrift values for most items. I only had 1 client get a letter from the IRS in 10 years for their contributions, and I always advised my clients if they had the records to back it up then do it.
I used tax act the year we did ours, and it had values for contributions in the program. The IRS will make you list the items when your items exceed $500, so it can be time consuming, but group like items together.
Good luck!
Karen
My backup was a hand written count sheet on the number of sheets and blankets etc. nothing fancy but since I don't show a pattern of maxing our charitable donations and can e plain with. Major house downsizing I figure I should be ok. It seems like a lot to is but we are small potatoes to the government froma revenue standpoint.