How to Determine the Value of Clothing Items Donated to Charity

December 29, 2011 · 3 comments

As per IRS guidelines, you are allowed to claim tax deductions for donations of clothing items to charitable organizations such as the Salvation Army and Goodwill.

According to IRS rules on non-cash charitable donations (assuming you’ll be itemizing your tax deductions vs. taking the standard deductions), tax filers are allowed to deduct the “fair market value” of clothing items donated to eligible organizations.

The IRS offers no clear guidelines on how to value specific articles of donated clothing for tax write-offs, however, they do loosely define what they mean by “fair market value”:

Used Clothing
Used clothing and other personal items are usually worth far less than the price you paid for them. Valuation of items of clothing does not lend itself to fixed formulas or methods.

The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value.

You cannot take a deduction for clothing donated after August 17, 2006, unless it is in good used condition or better. An item of clothing that is not in good used condition or better for which you take a deduction of more than $500 requires a qualified appraisal. See Deduction over $500 for certain clothing or household items, later.

For valuable furs or very expensive gowns, a Form 8283 may have to be sent with your tax return.

To help you to determine the value of any clothing items you’ve donated to charity in 2011, I’ve created a free program in Excel. It super easy to use, simply download the form and enter the number of items you’ve donated in the appropriate box and the program will automatically calculate a reasonable fair market value of your clothing items.

In the example screen shot above I have entered 5 “name brand” T-Shirts into the spreadsheet and 2 “designer” T-Shirts. The total value of each category donated is calculated in the right hand column.

Note: This is the total value from all items in the program, not just the value of the "tights" and "handbags"

Also, as you enter new items into the donated clothing value calculator it automatically computes the “grand total” at the bottom of the sheet. This is the total value of your donated clothing!

Don’t limit yourself to the values listed in this program which are based on my own research over the years of observing clothing values in consignment and thrift shops. If you have a particularly expensive item like a fur coat, evening gown or other high dollar item, don’t be afraid to write-off a higher value if you can make a reasonable case as to the item’s worth.

Remember, if the value of your donated items is more than $500, you may have to fill out an additional form for the IRS (be sure to check with a tax professional).

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{ 3 comments… read them below or add one }

Beth December 30, 2011 at 9:58 pm

How do you feel about the free website “It’s Deductible”? It figures out the value for you and imports the information into Turbo Tax?

Do you think I’m getting fair value using that tool?

Thanks … I ADORE your blog …

Arianne March 22, 2012 at 5:13 pm

this was great, I LOVED the Excel sheet, very helpful.

S February 6, 2013 at 1:06 pm

Just made my life a little easier. Thanks!!!

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