You would not have to get an appraisal, as long as a single item of clothing does not exceed $500. ". You would be required to submit the 8283. You are correct in that Goodwill gives you a receipt that says you donated. It will says something similar to "1 box of clothing" or "4 bags of clothing'. You will be required to set a dollar amount for the items you donate.
Just to cover yourself, you should take some pictures of the items you donate. In the event of an audit, you will be able to provide pictures of the items along with the name brand of the item. This would be one method in showing the IRS that the items you are donating have more value than an average item.
But, keep in mind that clothing has virtually no "resale" value and are deductible at a price far less than you paid for it. Some tax preparers suggest 10% of the original value, which falls in line pretty closely with the upper end of the Goodwill Valuation chart. Unfortunately, the price you paid for a piece of clothing is no where near what the average person would be willing to pay to purchase the item at a garage sale/ thrift store. This is most often the accepted standard by the IRS.
As an example, the $150.00 shirt would be deductible at about $15.00. You may feel that it has more value, however, clothing, being as it is, does not have much of a value after it is purchased new. If you feel that it should be worth more, you can deduct more, but in the event of an audit, you will have the burden of proof. Simply saying I paid $150.00 for this shirt, is not proof. Many items like ball gowns are very expensive to purchase, but the resale value generally runs between $20 and $40, being generous.
Just keep in mind, whatever value you assign to an item, in the event of an audit, you will be required to prove the value. You must remove yourself emotionally from valuing the item and must set a value that is reasonable according to what someone would pay for the item, in good, used condition.
This quote is taken directly from the IRS website: "Used clothing.
The fair market value of used clothing and other personal items is usually far less than the price you paid for them. There are no fixed formulas or methods for finding the value of items of clothing. You should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops."
If the IRS determines that you have overstated values you are subject to penalties in addition to losing the deduction
, the penalty structure reads as follows:
You may be liable for a penalty if you overstate the value or adjusted basis of donated property. 20% penalty.
The penalty is 20% of the amount by which you underpaid your tax because of the overstatement, if:
The value or adjusted basis claimed on your return is 150% or more of the correct amount, and
You underpaid your tax by more than $5,000 because of the overstatement.
The penalty is 40%, rather than 20%, if:
The value or adjusted basis claimed on your return is 200% or more of the correct amount, and
You underpaid your tax by more than $5,000 because of the overstatement."
So, you should be very careful in valuing these items. In my opinion, you should take no more than 10% of the purchase price.
But, for the dollar amount you are planning to donate, you must adhere to the following;
Deductions Over $500 But Not Over $5,000
If you claim a deduction over $500 but not over $5,000 for a non cash charitable contribution, you must have the acknowledgment and written records described under Deductions of At Least $250 But Not More Than $500 . Your records must also include:
How you got the property, for example, by purchase, gift, bequest, inheritance, or exchange,
The approximate date you got the property or, if created, produced, or manufactured by or for you, the approximate date the property was substantially completed, and
The cost or other basis, and any adjustments to the basis, of property held less than 12 months and, if available, the cost or other basis of property held 12 months or more. This requirement, however, does not apply to publicly traded securities.
If you are not able to provide information on either the date you got the property or the cost basis of the property and you have a reasonable cause for not being able to provide this information, attach a statement of explanation to your return.
Just be sure that whatever amount you value your donation, it falls within the guidelines and keep written proof ( and pictures if you can) of the items to show that your items would be worth more than average donated items.
Hope this helps.