non cash donations WWYD?

[Possi]

Very high brow clients here. They dress to the nines. 

Now, she's cleaning closets. And donating it all. 

Anne Klein White Blouse.... original value $50..... donated value...$25

Oklahoma City Police Department T-Shirt.... orig $40... donated value.. .you guessed it... $20

Victorian couch- burgundy stripe... orig $600... donated value $300

Name brand suits, name brand clothing... and the names are here, listed in detail. Seven computer printed pages. 

Grand total cost was $9228 and they expect me to take 50% as donated value $4614 PLUS MILEAGE for the trips to the donor centers. 

Honestly, I do loathe this 8283.

So, should I cut it in half again? Or should I take it as it is and refer to it as "consignment value" instead of "thrift value?"

What Would You Do? 

[Abby Normal]

Tell them it's not reasonable and send them this link:

https://satruck.org/Home/DonationValueGuide

They can use the high column if they feel it's appropriate.

I had to do the same thing last year, and my guys have been doing this for years, before they came to me. I told them I was trying to protect them from being audited. But at least they gave me an itemized list. I did a spreadsheet and came up with a % to reduce their numbers by.

It doesn't matter that it was expensive to begin with. Thrift store value is market price.

[BulldogTom]

Act like a very "high brow" accountant, have your assistant do the data entry, and then "charge them to the nines".   If the IRS questions the donations on their return, "charge them to the nines" again for your defense.   

Tom
Modesto, CA

[BulldogTom]

Actually, do what Abby says.   I was just trying to be funny.

Tom
Modesto, CA

[Possi]

1 hour ago, BulldogTom said:

Act like a very "high brow" accountant, have your assistant do the data entry, and then "charge them to the nines".   If the IRS questions the donations on their return, "charge them to the nines" again for your defense.   

Tom
Modesto, CA

ACTUALLY,  I already DID  that part! My assistant is the one who flagged it! LOL LOL 

My next course of action is to do what Abby said. I won't file it like it is. 

[RitaB]

20 minutes ago, Possi said:

ACTUALLY,  I already DID  that part! My assistant is the one who flagged it! LOL LOL 

My next course of action is to do what Abby said. I won't file it like it is. 

That's what Jesus would do.

[Gail in Virginia]

Maybe in addition to the codes for thrift sale price, or consignment shop price, we need one for overstatement of value by taxpayer against advice of preparer.  That wouldn't throw up any red flags, I'm sure.  And then IRS could develop an algorithm for how high it has to be before they decide to audit.  JK. 

[WITAXLADY]

I have always used 1/3 on the 8283 - maybe I need to go to 25%!!

D

[Hahn1040]

Love it!

I'll use that one for my guy who listed windows for $850 donated to a Restore type of place.  Original price $1,200.  "They were new never used"  And $350 for a bike!  UGH!

[Catherine]

2 minutes ago, WITAXLADY said:

I have always used 1/3 on the 8283 - maybe I need to go to 25%!!

D

I've generally used 25% for our donations.  25% of what WE paid; not what it would cost today.

[Lion EA]

I tend to 1/5 or 1/4 depending on how quickly an item might wear out (winter boots - fast, jewelry - slow). If a client uses something like that, I'm good. Otherwise, I hand it back to them with a valuation list from Goodwill or Salvation Army or tell them to get one from the charity they used and revise their list.

I have a LOT of trouble getting clients to give me their ORIGINAL prices, though. They give me lists with the used prices. If the used prices seem reasonable, I use my 1/5 or 1/4 to gross up to the purchase prices.

[Possi]

1 hour ago, Lion EA said:

I tend to 1/5 or 1/4 depending on how quickly an item might wear out (winter boots - fast, jewelry - slow). If a client uses something like that, I'm good. Otherwise, I hand it back to them with a valuation list from Goodwill or Salvation Army or tell them to get one from the charity they used and revise their list.

I have a LOT of trouble getting clients to give me their ORIGINAL prices, though. They give me lists with the used prices. If the used prices seem reasonable, I use my 1/5 or 1/4 to gross up to the purchase prices.

That was the big shock.... she listed what she paid for each item. And she paid even dollar amounts. One men's suit, $850. It is laughable, really.THREE. PAGES. 

[BulldogTom]

5 minutes ago, Possi said:

 One men's suit, $850. It is laughable, really.

That is not an unreasonable price to pay for a good suit.   Even a cheap suit will run 200-300 at JC Penny.   A good silk sportcoat will go for $300-$500 at a good retailer.   I would not be surprised that someone who dresses well would pay nearly $1K for a nice suit.   But then I am in CA, so maybe that makes a difference.

On the other hand, Goodwill will charge about $50-$100 for that same $1,000 suit.

Tom
Modesto, CA

[Catherine]

1 hour ago, BulldogTom said:

On the other hand, Goodwill will charge about $50-$100 for that same $1,000 suit.

Bingo; that's the crucial part.  Yes, good suits will run that $850.  Custom three piece, double that price.  But the thrift stores don't care, and won't charge more for a "bespoke" suit than for an off-the-rack Sears special.