Non cash charitable tax change I propose, your thoughts.

[AZ-Tax]

Come, on, having the taxpayer calcuate the FMV on their donations is a nightmare and a half for most taxpayers not to mention being all over the board with their FMV on the same designer brand jeans. I suggest when Goodwill picks up there bags of clothes, household items like furniture etc., the workers need to tag it that is was donated by Mr. Jim Smith, address & phone. Then when the Goodwill truck get to the sorting facility or where ever it goes, let Goodwill determine its FMV and send a letter of the FMV to the donor for them to give to their tax preparer. If its a Goodwill drop off box, then the donor needs to include in the bag of items, their name, address and phone number so a "FMV report" can be mailed to them.

There is pros and cons as to if the (Pros) taxpayer will increase their donations by not having to track the FMV to those (Cons) taxpayers that use the 100% of what I bot it for FMV thus not allowing the methond no more.

[Uncle Sam]

Would you like to work for Goodwill to have the job of valuing every item that comes in?
Including underwear and socks?

I can just imagine Goodwill Industries hiring a "FMV Expert" using donation dollars received from contributors to pay for that service. That COULD possibly subject the organization to losing its charitable donation status.

Your idea sucks.

[veritas]

I think the idea has merit

The caveat I would add is the donor would pay a fee for the service.

[FEDUKE404]

My observation

The local Goodwill store has one of the largest dumpsters around.

Wanna guess where a lot of those "valuable" donations end up???

From my standpoint, I would like to see the IRS grow a set or two to discourage those "$500 garbage bags" of used clothing donations that seem so frequent.

As for the "nightmare" it really is not that difficult to make a quick summary of how many of what got donated, and then from a current store price list come up with a suitable dollar donation amount.

FE

[Lion]

The Store Prices

The Goodwill store or whatever resale shop is going to price the goods anyway, put price tags on, toss the unsaleable items.

I have a client who would wait while the manager put a price on each line of her itemized list when she donated. If the list was long or the manager wasn't in, my client would pick up her list another day.

[S T]

I am all for Goodwill, Salvation Army etc start signing those receipts and writing a $$ amount the donation was valued, just like the Charity Organizations that now have to furnish a receipt for the Check/Cash they receive.

I would really like that 8283 form to become "obsolete"

Sandy

[AZ-Tax]

Nightmare?

As for the "nightmare" it really is not that difficult to make a quick summary of how many of what got donated, and then from a current store price list come up with a suitable dollar donation amount. FE

FE, all of us on this board know its not that difficult but we are dealing with average taxpayers here that in most cases do NOT balance their check books and then cannot figure why they are over draft. This allowing the charity to determine is not exactly how current doanted vehicles is determined but is similar and that system I think works far better then the old system. Bottom line, the average taxpayer prefers "no homework".

[JohnH]

Or else they toss us a bunch of Goodwill receipts with the notation "Just take the max".

[Uncle Sam]

Non-Cash Donations

The charity should not be responsible for valuing items donated to it unless they have a resident valuation specialist in tangible personal property.
That's just another area the IRS has of auditing the validity of the organization's exempt purpose.
It's the taxpayers' responsibility to document the value of items given for donative purposes.

[FEDUKE404]

Some personal observations

FE, all of us on this board know its not that difficult but we are dealing with average taxpayers here that in most cases do NOT balance their check books and then cannot figure why they are over draft. This allowing the charity to determine is not exactly how current doanted vehicles is determined but is similar and that system I think works far better then the old system. Bottom line, the average taxpayer prefers "no homework".

While I clearly see your point, I also note that "average" taxpayers now have to deal with Forms 1099 from their bank/investments, Form 1098 to claim most mortgage interest, Form 1099-B (now with cost basis!) for stock sales, obtaining valid receipts for all cash donations, and even having to report unemployment payments.

Since my behind is now, to a certain extent, on the line for any client with a little slip of paper wanting to claim excessive amounts of money for a bag of (frequently) worn out clothes and household gadgets, I do feel the need to push the matter a bit. The responsibility is on the client, not on me, to obtain/maintain reasonable receipts that can stand up to an audit.

Just this week my own college student made a small online contribution to a well-known national organization....I think part of an upcoming challenge run or something. A few mouse clicks produced a perfect receipt with all of the verbiage on it that will soothe the hearts of even the most hardened IRS agent.

I don't know how the donation sites work in your area, but around here they are a complete circus. One side of the coin involves the folks trying to rid themselves of anything to get a white Goodwill receipt - beats a trip to the landfill. Other side of the coin involves the people at the facility who just try to "clear out" the backroom, keep the dumpster well fed, and move on. The last thing on earth they want is "paperwork."

As for me - I've had enough of the late folks and plan to go work in the yard most of today. ( "Defectus tuus consilium carpere discrimen mihi non constituit." ) October 15th will be here soon enough!

FE

[DaveO]

I really dislike the idea that some taxpayers have that their worn out clothes and other junk is worth big bucks. I respond by charging extra for the forms and detailing it on the bill.

[JohnH]

When they ask me to "claim the max", or any time they have over $500 for any reason, I give them back their receipts with a worksheet that mimics the 8283 and have them fill it in & send back to me. That's the info I enter on the return. If they don't want to take the time to do that, then neither do I.

[RitaB]

Absolutely

I would really like that 8283 form to become "obsolete"

Sandy

Yes! That form is the bane of my existence. (I have no idea what that means, but I'm pretty sure it works here.)

Must of my yayhoos that bring in those dang blank Goodwill forms can't even itemize. But, you don't dare tell them, cause then you have to teach the Schedule A seminar. AGAIN.

[PIGLEE]

I have gotten to the point where I don't even ask them about it anymore. The ones that have the good deductions will have the information and values with them will TELL me. To much time spent explaining what they have to have, if I ask them. I have discovered that people with a lot of Good stuff will call me during the year and ask what to do. In my newsletter, I always have a note about what they need to have.

Life has been easier if I don't ask during the interview. I feel I have let them know about it in my newsletter.

[Burke]

I have taken to providing copies of TTB page 4-2 to any of my clients who do not have a detailed list of their goodwill items. If they can't provide an itemization as the IRS requires, then it does not appear they have a deductible contribution, IMO. Also, I have noted from personal experience, any donations of computers, electronics, printers, scanners, mice (mouse's?), cell phones, external hard drives, car radios, speakers and the like are all dumped in another big dumpster and some recycler picks up --- probably ships them to China. So forget any values of that sort of thing since they are not for resale. Although the last time I was there, one of the guys in receiving looked hard and long at the radio and speakers, before he finally dumped them. And then fished them out again.