I am getting a lot of emails about people who are complaining that I am too harsh on them for trying to claim B-O-C clothing donations. Stop and think for a second, ladies and gentlemen. You are giving away clothes that you paid hundreds and maybe thousands of dollars for. Today though, they are worth salvage value unless proven otherwise. B-O-C by the way means “bags of crap”.
The IRS and State taxing agencies have no problem with you if the charity actually uses the old size 9 disco heel stilettos that you are giving as long as they are being used for the value that that you are reporting.
Example: You donate a rare painting to your favorite charity.
Your charity gives you a Goodwill type of receipt and it has no dollar value on it. You write in the dollar value of $10,000. The charity takes the painting and puts it on a shelf next to an Apple II computer that has been broken since the Reagan years and near a pair of torn tennis shoes. The IRS would allow zero dollars for that donation.
Let us change it around a bit. Let us say you get a legit appraisal from a professional who specializes in rare paintings, specifically he is an expert in your painting. He puts in writing that he feels the value of the painting is $8000. Let us say the charity this time auctions the painting off for $6000. You could take a tax deduction for the painting on Schedule A under charity for $6000. Make sure you have both the estimate and the results of the auction to complete the forms from the Schedule A.
If you don’t follow the rules from the IRS they will treat your BOCs like they are bags of crap because frankly, that is what most of the items are. They are things that you were going to get rid of anyways and some of the things may not work or be eaten down by moths.
Just remember at tax time to pay attention to the details and at worse case, remember that you are giving for charity’s sake first, and a tax break second.
April 05 2009
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Kim Isaac Greenblatt
Reminder About B-O-C Clothing Donations
