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If i donate $200 each day for 10 days to different

If i donate $200...

If i donate $200 each day for 10 days to different charities, and the goods are similar like various items of men's clothing, have I exceeded the $250 limit to trigger requirement for an acknowledgement or appraisal?

Accountant's Assistant: The Accountant will know how to help. Is there anything else important you think the Accountant should know?

For past 10 years my donations like this average 5000 or more

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3/11/2018
taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,137
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Customer reply replied 4 months ago
i give household items, like clothing, book, kitchen items, furniture to good will salvation army etc. Each donation is less than a fmv of $250. However, because I give to many charities, the total may be over $5,000. Have I exceeded the limit for "similar items"? Would the answer be different if I gave men's clothing to each charity? Also, is the limit $250 to give getting a receipt but not a mailed acknowledgement?
Customer reply replied 4 months ago
let's try to answer this using the e-mail 'chat'.

The IRS rules for noncash charitable contributions are fairly clear.

1) Clothing and household items not in good used condition and valued at or above $500 must have a qualified appraisal attached to the return (otherwise, clothing or household items NOT in good or better used condition may not be claimed).

2) Any personal property with a claimed deduction exceeding $250 must include with the return a written communication from the qualified organization containing the name of the organization, the date of the contribution and the amount of the contribution; and the client must have an acknowledgement stating whether the organization provided any goods or services in exchange for the gift and, if so, a description and a good faith estimate of the value of those goods or services.

So, assuming that your goods ARE in good condition (if not, no deduction) then you only need a receipt for your records. If the total noncash contributions exceed $500, you must file a Form 8283 to list information about this.

You only need an appraisal if the individual item is over $5,000. The rules say:

"For noncash donations over $5,000, the donor must attach Form 8283 to the tax return to support the charitable deduction. The donee must sign Part IV of Section B, Form 8283 unless publicly traded securities are donated. The person who signs for the donee must be an official authorized to sign the donee's tax or information returns, or a person specifically authorized to sign by that official. The signature does not represent concurrence in the appraised value of the contributed property. A signed acknowledgement represents receipt of the property described on Form 8283 on the date specified on the form. The signature also indicates knowledge of the information reporting requirements on dispositions, as previously discussed. A copy of Form 8283 must be given to the donee."

I hope this answers your question. If you have any more, please feel free to ask and I will be happy to answer.

Thanks!

Roger

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Customer reply replied 4 months ago
your opinion is that multiple donations of good condition household goods to different charities do not constitute 'similar items' triggering a need for an appraisal?

It is not my opinion. It is my knowledge of the rules and from doing this for over 33 years.

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Customer reply replied 4 months ago
ok, so a number of books is "similar items" but a variety of household goods is not?

That would be correct. Similarly, several bags of clothing would be similar items.

However, different dates would require them to be listed on the Form 8283 on different lines.

And, with all of them, the appraisal limit is still $5,000.

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Customer reply replied 4 months ago
also, for valuing good condition household goods we used a 15% of new as average multiplier to get fmv. Would it be necessary to go item by item for valuation for a tool such as Intuit It's deductible?

The case that the IRS looks to is Smith v Commissioner, TC Memo 2014-203. In it, Smith gave lots of items to charity. The court disallowed the deduction NOT for lack of appraisal, but for lack of substantiation. He provided undated spreadsheets listing the cost and value of the items AFTER the IRS questioned them. The records are supposed to be prepared at the time of the donation.

The IRS accepts values from multiple sources. The Salvation Army provides values on its website. There are numerous charities that so the same. Intuit (TurboTax) and other tax software also have tools.

And, 15% is a good, conservative value. I usually use cost as 5 times current FMV.

taxmanrog
taxmanrog, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 1,137
Experience: Licensed CPA, MA, MST with 31 years' experience. Teach Accounting and Tax courses at Masters level.
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Customer reply replied 4 months ago
8,000 fmv of various types of household goods at $249 per charity given 200k gross need be listed on the form but no appraisal. But is the second part of the form required if I exceed 5000 total?

No, it is if any particular group of items (similar, aggregated) exceeds $5000. And that is even conservative. I have personally seen people move and downsize and give $15k of goods to charity with no appraisal. The Big 4 have taken the position (and most firms have followed) that if no individual item exceeds $5,000 then no appraisal is needed. For example, if you gave furniture worth $8,000, but one table is worth $6,000, you would need an appraisal only for the table.

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Customer reply replied 4 months ago
ok, just wanted it as clear as possible. I have had every cpa complain how long it takes to fill out the tax form on charities. Can you explain why they would complain given the level of detail I am providing with everything tabulated on excel? Is putting down 30 or 40 charitable donations considered a tax professional rate or a clerical rate?

Because they can't bill out for the time. The Firm I work for will often summarize, using "Various" for the contribution and purchase dates. The IRS accepts it, but they do not have to.

Same for the Form 8949 detail. For my own clients, I still fill out the form for each transaction. The firm I work for, and most others, say "see attached" and attach a PDF to the efiled return.

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