Reminder: there are only 20 days left to file your 2013 tax returns without an extension.
So what is property? Property is anything you own that isn't money. There are special rules for donating 10 different types of property. I will discuss several of these over the next few days. Here are the ones with special rules:
- Clothing or household items.
- A car, boat, or airplane.
- Taxidermy property.
- Property subject to a debt.
- A partial interest in property.
- A fractional interest in tangible personal property.
- A qualified conservation contribution.
- A future interest in tangible personal property.
- Inventory from your business.
- A patent or other intellectual property.
The first and most common type of property contribution is clothing and household items. These must be in good used or better condition to be eligible for a deduction. There is an exception to this rule. If an item is not in good used or better condition, you may claim a deduction if it is worth more than $500 and you include a qualified appraisal with your return.
Property considered to be "household items" are furniture & furnishings, electronics, appliances, linens, and "other similar items.
Property that is NOT considered to be "household items" include food, paintings, antiques, and other objects of art, jewelry and gems, and collections.
The value of the deduction is limited to the fair market value of the item(s). Fair market value is considered to be "the price at which property would change hands between a willing buyer and a willing seller, neither having to buy or sell, and both having reasonable knowledge of all the relevant facts."
Two resources that you can use to value your donations of clothing & household items are from Goodwill and the Salvation Army. The DC Goodwill has a calculator on their site, and Intuit has a calculator called "It's Deductible".
If you need help with your taxes, give me a call at 832-387-4829 or email me by clicking the envelope in the upper right corner of the screen.