Tax Experts Urge Caution in Writing Off Donations of Used Goods

Many donors could get tripped up by new laws that govern gifts of used clothing, books, furniture, and other household items, reports The Wall Street Journal.

A law that took effect last August barred deductions on gifts of $500 or more unless the donated items are in “good used condition or better.” The law exempts pieces of art and vehicles but covers everything else, including clothes.

Because the Internal Revenue Service has not issued guidelines or a definition of “good,” tax specialists are warning people to be especially careful when taking write-offs this year for their donated items.

The only sure way of claiming a deduction, the article reports, is providing an independent appraisal of the value of the items, something few donors know to do.

Read The Chronicle of Philanthropy’s coverage of how last summer’s new tax laws affect nonprofit groups.

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