How to Determine Fair Market Value of Clothing. Whenever you donate clothing to a charitable organization like Goodwill, you need to determine the fair market value for your taxes. You can get a receipt from the charity but usually it will be blank and it is up to you to determine how much you can deduct on your taxes. The following will tell you how to determine the fair market value of clothing.
Go to a local thrift store and check the value of the similar items there. You may be able to take your clothes to the thrift shop and ask them to give you an estimate of their value before you donate them.
Ask the charity for a dated receipt and see if they will fill in a value amount for the clothing you are donating. Most of the time they will give you a dated receipt without any value on it and it is up to you to determine the fair market value.
Use "It's Deductible" if you are using Turbo Tax or another tax software. With "It's Deductible," you just need to put in the items and it will calculate the amount of your deduction. For example, if you donated four pairs of jeans and they were in good condition you put this into the software and it will come up with the amount you can deduct.
Determine the fair market value of the clothes by using your original receipts for the clothes and taking 25% of the value. For example, if you donate clothing that you paid $100 for, you can deduct $25 as the fair market value.
You don't need to send the IRS any receipts or worksheets you use to determine the fair market value of the donated clothing.
- You don't need to send the IRS any receipts or worksheets you use to determine the fair market value of the donated clothing.
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