April 4, 2002 | Read Time: 2 minutes
What’s the fair-market value of a pair of gently used Rollerblades? A box of old murder mysteries? Or a men’s three-piece business suit? As the April 15 tax deadline approaches, many Americans who want to claim a deduction for the goods they donated to charity find themselves facing these kinds of questions.
For the past 13 years, Income Dynamics, a company in Omaha, has surveyed thrift and consignment shops across the country to determine the going rate for used clothing, household goods, sporting equipment, and other items often donated to nonprofit organizations. The company publishes its findings annually in book form, and for the past two years as a software program, available for $29.95, called ItsDeductible.
While most people realize that they are entitled to a tax deduction for the items they donate, few understand how to properly value those items to get the full tax benefit to which they are entitled, says Bill Reed, the company’s vice president of marketing and distribution. “What typically happens is that someone will take three bags of clothing to Goodwill, and if you ask the average person how much that’s worth, they might guess 20 bucks a bag, 30 bucks a bag. Generally they’re conservative,” he says.
He compares those estimates to the company’s research that found that the fair market value for a long-sleeve men’s dress shirt in good condition is $16.
In addition to helping donors determine the value of the items they contribute, the software also allows users to track both their cash and in-kind gifts over the course of a tax year.
In November, Income Dynamics purchased Strong Numbers, a company that tracks and analyzes sale prices at online auction sites and other Internet retailers. Mr. Reed says that Income Dynamics hopes to use those data to expand its listings for used electronics and computer equipment, which he says are more likely to be sold online than at a thrift or consignment shop.
For more information: Go to http:// www.itsdeductible.com.
