Tax Tip of the Week
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Reclaim your garage and get a tax deduction too
For the week of
March 26, 2001
Is your garage or storage unit full of "treasures" that you will never
use again? If you donate your property to a qualified charitable organization, you can reclaim the space. A charity
can turn your donation into cash and use the cash to help others. And you can take a tax deduction for the fair
market value of your contribution if you itemize deductions on your tax return.
Here's what you need to do to qualify for a tax deduction:
- Make your donation to a qualified organization.
This means a charity recognized and given special tax status by the IRS. Find out if an organization is eligible
to receive tax-deductible charitable contributions by calling the IRS at 800-829-1040 or by searching the IRS Web
site at http://www.irs.gov/charities/page/0,,id=15053,00.html.
- Get a receipt from the charity. The receipt
should include the name of the organization, the date and location where you made your contribution, and a reasonably
detailed description of the property donated.
- Place a fair value on each item donated.
Fair value is the amount you could sell the item for, not what the item cost or its replacement value. For example,
if you donate items to your local thrift shop, look around and see what they are selling similar items for.
- Itemize your deductions, and deduct the fair market value of your contributions. If the amount of all your noncash donations is more than $500, you must include IRS Form 8283 with your return, or the IRS can disallow your deduction. Contributions of property over $5,000 may require a written appraisal from a qualified appraiser.
For more information about this or other tax-cutting ideas, give us a call. We are here to see that you pay no more tax than the law requires.
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The information contained in this site is of a general nature and should not be acted upon in your specific situation
without further details and/or professional assistance.
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