How to Determine the Fair Market Value of Personal Property
- 1). Visit the IRS website and download Publication 561 (see Resources below). Publication 561 provides detailed information on the guidelines, itemization and value of personal property.
- 2). Compare pricing. Once you have read Publication 561, do a little research to determine what item(s), similar to yours, actually sells for (this will let you know if you are recording prices that are too little or too much). The Salvation Army provides an itemized list, online, if you will be donating clothes, dry goods, furniture and sporting goods (see Resources below).
- 3). Determine if your chosen charity is a 501(c) 3 organization. Charities that are 501(c) 3 organizations are registered with the IRS. This kind of organization is the only kind of charity eligible to provide a tax deduction for the personal property you will be donating. Every charity registered as a 501(c)3 organization is also registered with the Better Business Bureau (see Resources below).
- 4). Get an itemized receipt from the charity. In the event you are audited, you should always get an itemized receipt from the charitable organization to keep with your tax records. Ensure the receipt has the name of the charity and, if applicable, the stamp or seal of the charity.
- 5). Include an IRS Form 8283. If you have donated over $500 of your personal property to a charitable organization, you need to have an IRS Form 8283 attached to your tax return (see Resources below).
