ANCHOR: If you donated a lot of stuff at the end of last year, you might be wondering how to value those potential deductions.
ANCHOR: Money and real estate expert Ilyce Glink is here with a new tool that might help make that job a whole lot easier.
ILYCE: Let’s start with some of the basic rules for taking a tax deduction on items you donated. First, the items must have been donated by the end of the year. The total value of the deduction can’t exceed 50 percent of your adjusted gross income, and if the value of an item exceeds $500, you’ll need to file IRS form 8283, available at www.IRS.gov.
Making a Donation, Taking a Tax Deduction
Items must be donated by 12/31/01
Total value cannot exceed 50% AGI
If $500 + file IRS form 8283
ILYCE: What can you deduct? Clothing, toys, cars, household goods, cash or artwork. Just about anything lying around your house.
What can you deduct?
ILYCE: What’s not deductible? Tickets purchased to a charity event. Items bought at a charity auction for fair market value, blood donations, tickets for a charity raffle or lottery, or income lost while volunteering.
What’s NOT Deductible?
Purchasing tickets to a charity event
Items bought at a charity auction for FMV
Tickets for a charity raffles/lottery
Lost income while volunteering
ILYCE: Now, the IRS allows you to take the lessor of your purchase price versus the fair market value of the item, and that’s where IT’S DEDUCTIBLE comes in. The software has nearly 1,000 items in its database, along with the fair market value depending on whether the item is in good, fair, or poor condition.
ILYCE, LARRY, AND ROSEANNE AD LIB.
ANCHOR: Where can you purchase IT’S DEDUCTIBLE?
ILYCE: The software is $29.95 and you can buy it at their website, www.itsdeductible.com. If you get your taxes prepared by H&R Block, they’re offering clients a discount.