Items you will need
- IRS Forms
- Bank Account
- Tax Preparation Software
How to Figure Fair Market Value for Donations of Property to Charities. If you donate physical items - a couch, refrigerator, clothes, etc. - to a qualified charity that will use the donation to further its exempt purpose, you can take a tax-deduction value equal to that of the donated items "fair market value." Fair market value is the amount of money at which property would sell between a willing buyer and seller.
Claim as the value of donated goods the price that buyers of used items actually pay in used stores, such as consignment or thrift stores, if you are donating used clothing or household goods.
Consult a blue book guide that lists values for similar makes and models if you are donating cars, boats or aircraft. Adjust your estimate for unusual equipment, mileage or physical condition
Ask the charity for an itemized receipt for the items, regardless of whether they are worth $25 or $250, to protect yourself in case you are ever audited.
Attach Internal Revenue Service Form 8283 to your return, giving the name and address of the recipient organization, a description of the property contributed, the date the property was acquired, how the property was acquired and its fair market value if the gift's value is over $500.
Get an independent qualified appraisal done and attach a copy if the value exceeds $5,000.
If donating a boat, base your estimate on a marine surveyor's appraisal. It's wise to back up your numbers by including receipts, canceled checks, photographs or other relevant evidence. Articles in magazine or in newspapers, photographs that show the item and statements by the recipients of the items also can come in handy. But these should not be included in your tax return.
Special rules apply if you contributed the following: property that has increased in value, property that has appreciated because of its age or rarity; inventory from a business; property subject to a debt or partial interest in or a future interest in personal property.