Is it better to donate or better to sale cheap at a garage sale?

Question

Any advice or suggestion on how to tell which is better for personal finance reasons?

Answer 1

This depends on several factors, including your tax rate. Let's say that your effective tax rate is 20 percent and you have an item that originally cost $300 and its fair value is $100. If you donate the item valued at $100, you can claim the donation as a tax deduction and you will save $20 in taxes. If you sell that item for $100, you have a capital loss that you cannot claim on your tax return, but you have $100 which is not taxable income. So you are better off selling the item. More likely, however, you may get only $40-$50 for that item in a garage sale.

However, you should also weigh the benefit of selling against the burden of advertising the sale, organizing a garage sale, spending your valuable time, and having strange people rummaging among your possessions. Donating the items might be a lot less trouble.

There is also a psychological benefit in feeling good about helping the needy by making the donation. Furthermore, if you are in a much higher tax bracket the donation offers a bigger tax benefit and your income level may be such that the time and trouble of a garage sale is not feasible.

Answer 2

Usually, donate.

1) The hassle of setting up, staffing, and advertising a garage sale is significant. Unless you've got a lot of stuff to sell, it ain't worthwhile.

2) If you donate, you get a tax deduction. Unsually garage sale prices are half or lower of Salvation Army/Goodwill prices (which you get to deduct), so, here's the math:

Donate $1000 in goodwill-prices to goodwill, get a $300 off your taxes (assumes 30% tax bracket). If you want your money sooner, tell your employer to deduct less taxes from your check for awhile.

Sell the same items at a garage sale, get $500 (if you're very lucky). The difference isn't worth the hassle. Most of the time, you will be lucky to get $250.00.

3) You are donating to a good cause, saving time, and possibly saving money. Goodwill will sell your stuff and get $1000, while the most you could possibly get is $500.

4) You don't have to worry about the security and liability hazard of having strange people on your property.

-->Adam

Answer 3

Sell the items. Garage sale or Ebay might work. If you donate, you get to deduct the value of the item, but your tax savings might only be 10% of the value of the item.

Answer 4

You can donate to Salvation Army (among other charities) and it is tax deductible. If you would like to sell it, you will get cash now. Also, you may have to haggle with people and you probably won't sell everything. You can also do both. Sell what you can and make a tax deductible donation for the rest. You will need a receipt to prove the tax deduction.

Answer 5

Tax free cash is always better, what you don't sell donate. Of course you can always inflate the value of donated items but as you know .. ya don't get full value. Let's face it everyone fudges on taxes hehe.

Answer 6

sell first and then what you don't sell donate, better to have a bit of cash for you first!