Would it be better to sell something used or donate it and get the tax writeoff?

Question

I have a wedding dress that retailed new for $5k, but if I were to try to sell it now (9 years later), I could only get $200 for it (on ebay). if I were to donate it, how much could I write off? Conceviably if I were to find just the "right" buyer, it would be worth at least $1500, but most consignment stores won't even think of selling a wedding dress that is older than 1 year. And it could take me years and a lot of work to find the right buyer.

Answer 1

You can deduct the fair market value (FMV) of the item, which means you should claim as the value the price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops or ebay. That is if you only use itemized deduction (usually when it is greater than your standard deduction). remember, If you do not use itemized deduction on your tax return, your donation deduction (FMV) is essentially will not give any benefits at all.

If I were you, I would keep it for my kids grow up. Who knows, old fashion seemed always comes back. You already kept it for 9 years. Why not several more years. Also you can try to sell it on Ebay with a reserve price, which means if you do not get a price you expected, you do not have to sell it.

Clothing donation value reduces your taxable income as part of the itemized deduction, but does not give you tax writeoff.
I hope this helps.

Answer 2

Whi`h would be better depends on how you define "better". Better for you financially? Sell it rather than donate. Better for the organization? Well, they'd profit from the donation...

If you sell it, you say you could get around $200. Then if you donate it, $200 would be the value of your deduction if you itemize - if you don't, there's no deduction. If you get the deduction, your tax savings would be $200 times your tax bracket, so if you're in a 15% bracket your tax savings if you donate it would be $30.

Answer 3

What tax writeoff? You can only deduct what an item is worth. You state that you already know that a typical eBay say would net you $200--then that's the number you would be able justify on your taxes.

Answer 4

I would say $200. The rule is what a willing buyer would pay a willing seller. Your idea of the "right" buyer, someone desperate enough to pay 7.5 times the eBay price, is not what they mean by a willing buyer.