Charitable deductions

[Margaret CPA in OH]

Clients are moving and donating furniture.  Several items went to Habitat for Humanity.  The value of the furniture was $170 but HH charged them $203 for transporting the furniture.  Is this charge also a donation?  I would like to think so but...

[Patrick Michael]

Can find anything either way.  For a $203 "donation", I would inclined to take let the client decide how much risk they want to take for a small reduction in tax. Just make sure they have everything in writing.

[Margaret CPA in OH]

I just wrote him that there should be written confirmation of the donation.  If part of the acknowledgement for the furniture donation, I would expect the additional amount be shown on the receipt. I'm not too worried about this, though, just thought I would ask as I wasn't sure. Thanks!

[Lee B]

If you could do this could you deduct mileage for hauling your donations to Goodwill or another charity???

[Margaret CPA in OH]

I think that would be appropriate but probably for a lot less than the amount charged.  At 14 cents per mile, I know the drop off was not 1,450 miles away.  And I really doubt that paying for a commercial transport service would qualify as a charitable contribution.  I'm hoping the charge was listed on the receipt.  If not, I would think to myself as I have done for other 'contributions' was this for charity or tax deduction?

[Lee B]

If the $203 was a charitable contribution, I would think the deductible amount would need to be reduced by the value of the service provided.

If Habitat for Humanity considers the value of the hauling service to be $203 then the deductible amount would be $ 0.

[Margaret CPA in OH]

Ooo, good observation!  Again, I don't think they will push it.  If so, I may bill them for the 'research' which, at this point, would be more than the deduction let alone the tax savings!

[Sara EA]

$203 is an odd amount, so this may be what it cost Habitat to come get the furniture (truck, labor, etc).  In that case, your client is paying that bill for them so I'd add it to the donation. This s kind of like the fees that credit card companies charge for online donations.  Donors are given a choice whether to pay it for the charity.  If they don't, the charity pays it.

[JohnH]

I’d be inclined to deduct $203 as a cash deduction to Goodwill and $170 as a non-cash deduction to Goodwill. The $203 is simply a cash contribution towards the  charity’s operations.
 

But I’d let the client know the issues is unclear and let them make the final decision on the $203.