If the things you bought but never used -- or you used but no longer need -- are taking up too much room in your house, you can pass them on by donating them or selling them on consignment. Both options will help you clear the clutter in your home and reap nominal financial rewards.
Advantages of Consignment
By selling your unwanted items on consignment, you can get cash to spend on other needs. Consignment stores accept items in good condition and resell them for a percentage, sometimes as much as 40 to 60 percent of the sale price. Consignment sellers know the fair market value of your items and can price them accordingly. While you could sell the items yourself and keep all the proceeds, you would have to advertise the products and deal with strangers coming to your home.
Disadvantages of Consignment
Consignment stores have fairly strict standards when accepting inventory. These retailers aim to sell products of a certain quality. Home furnishings, should not have excessive scratches, dents or fading. Holes and stains in fabric are a no-no. Stores are partial to expensive brand names. If your items don't sell by the store's deadline, you may have to retrieve or donate them. And, you have no control over the sale price.
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Advantages to Donations
When you donate your items to a charitable organization, the recipient generally takes everything you bring. The organization's employees sort items and discard the ones that can't be sold. Your donations provide products that people can buy for less than retail price and create jobs in nonprofit charities. Goodwill, for instance, uses 62 percent of its proceeds to provide jobs, training and living assistance to people in the community. If your donated items go to a qualifying nonprofit, you can deduct the value of the donation from your taxes.
Disadvantages of Donations
Donations don't give you cash, but they can provide a tax break if you're willing to do the paperwork. According to IRS regulations, to claim a deduction for contributions of cash or property worth $250 or more, you must have a written record showing the amount of the cash or a description of the property. You also must note whether the organization provided any goods or services in exchange for the gift. If your total deduction for non-cash donations exceeds $500, include IRS Form 8283 with your tax return. Additional forms are needed if your donations exceed $5,000.
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