Charitable Contributions of Property

It has come to my attention that enough people do not know about a very important rule concerning charitable contributions. I'm not talking about the garden-variety check to the local police department. I'm talking about major contributions of furniture and household goods or other property (not including stocks) with a fair market value of greater than $5,000.

These days, it is not uncommon for new retirees to want to downsize and move somewhere warmer or more scenic. As part of that move, they give away half a house full of furniture. When it comes to tax time they want to take a charitable contribution for the value of that furniture, say $10,000. 

Get An Appraisal 

The rule here is simple: if a grouping of the same kind of items (say furniture) has a value of greater than $5,000, you must attach an appraisal to your tax return in order to claim that deduction. If you do not have that appraisal, your deduction is limited to $5,000 and even then, you would have a tough time proving it if you got audited. Yes, the appraisal will cost you something, but it's better than losing a big deduction and the appraisal itself may be deductible.

Take Pictures

In addition to the appraisal, which would give you an itemized list of the items and the value for each, you should take pictures of the items. This is just an additional layer of proof. When you are claiming a bigger than normal deduction, it is even more important to dot your "i"s and cross your "t"s. Not that this will necessarily cause an audit and you certainly should not take a deduction to which you are otherwise entitled for fear of an audit, but it may generate an inquiry from the IRS simply asking you ro prove the deduction.
Be ready. Take pictures and get the items appraised by a licensed appraiser.