Donations to schools and sports teams
Q. If my kid’s school or sports team collects donations to give to a charity, and I give, can I deduct the cost of what I donated?
A. Yes, but here’s what you need to know.
Donations of tangible property, furniture, art work, jewelry etc. will in most cases result in an itemized deduction on your federal tax return assuming the recipient is a qualified 501(c)(3) organization, said Steve Gallo, a certified public accountant with U.S. Financial Services in Fairfield.
But determining the value of that deduction is not always an easy task.
“The IRS will allow a deduction for the Fair Market Value (FMV) of the item being donated, therefore your cost will not necessarily be the allowable value unless it is a brand new item which you purchased and then donated,” he said.
If you are donating used furniture, jewelry, clothing or similar items, the age and condition must be taken into account to establish the FMV, Gallo said.
“As of Aug. 17, 2006, a deduction for clothing and personal household items in excess of $500 require a qualified appraisal to validate the deduction,” Gallo said. “The value the receiving charity sells the donated items for is the safest value to use for IRS purposes, but this may not always be easy to ascertain.”
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Karin Price Mueller writes the Bamboozled column for The Star-Ledger and she’s the founder of NJMoneyHelp.com. Click here to sign up for the NJMoneyHelp.com weekly e-newsletter. Like NJMoneyHelp.com on Facebook and follow it on Twitter.