Why tracking matters
Donating goods — clothing, furniture, appliances, inventory, or vehicles — can reduce taxable income when you itemize deductions. But the IRS requires proof: receipts, fair market value (FMV) calculations, and sometimes appraisals or special forms. Poor documentation is the top reason noncash deductions are reduced or denied in audits. Tracking donations protects the deduction, speeds tax preparation, and reduces audit risk. See IRS Publication 526 and Publication 561 for official rules (IRS.gov).
Step-by-step checklist to track donations
- Confirm the charity is qualified. Before donating, verify the recipient is a tax-exempt organization eligible to receive deductible contributions. Use the IRS Tax Exempt Organization Search. (IRS Publication 526.)
- Separate items and note condition. Create an inventory list: item name, quantity, brand/model (if relevant), condition (new, like-new, good, fair, poor), approximate date of donation, and location donated.
- Photograph items. Take clear photos showing condition. For larger donations (furniture, appliances), include close-ups of wear and serial numbers when present.
- Get a contemporaneous acknowledgement. Ask the charity for a written receipt that includes the organization’s name, date of donation, and a description of donated items. For vehicle donations, obtain Form 1098‑C or a written acknowledgment that meets IRS rules.
- Determine fair market value (FMV). Use thrift-store prices, online resale listings, and IRS valuation guidance (Publication 561). Document the comparable listings you used to support the FMV.
- Track total value and file required forms. If noncash contributions exceed $500 in a tax year, complete Form 8283 and attach it to your return. If any single item or combined items of the same type exceed $5,000, you will generally need a qualified appraisal and Section B of Form 8283 unless an exception applies.
- Keep records. Store receipts, photographs, comparison listings, appraisal reports, and affidavits for at least three years (and longer if your circumstances suggest; see IRS guidance on statutes of limitation).
Valuation basics and common methods
- Fair Market Value (FMV): The price a willing buyer would pay a willing seller for the item in its current condition. FMV, not original purchase price, governs the deduction amount (IRS Pub 561).
- Comparable-sales approach: For most household goods, find current resale prices for similar items on thrift sites, Craigslist, eBay completed listings, or local consignment shops.
- Cost basis approach: Use only when FMV reasonably approximates depreciated original cost; this is rare for older, used items.
- Appraisals: Required when a claimed deduction for a single item (or group of similar items) is over $5,000 (Form 8283, Section B) unless the item is a public-stock security or another listed exception applies. Use a qualified, independent appraiser and keep the appraisal report with your records.
Special rules to watch
- Form 8283: File when total noncash contributions exceed $500 in a year. Section B (appraiser and charity signatures) is required for items > $5,000.
- Vehicle donations: Different substantiation rules apply. If a charity sells the vehicle, your deduction is generally limited to the sale proceeds reported by the charity on Form 1098‑C or a contemporaneous written acknowledgment. If the charity substantially uses or improves the vehicle, you may claim FMV — but you still need proper written acknowledgement. See IRS guidance on vehicle donations (Form 1098‑C).
- Clothing and household items must be in “good used condition or better” to claim a deduction (unless the item is valuable; then valuation rules and possible appraisal apply).
Examples
- Clothing: You donate ten pairs of gently used shoes and five jackets. Each shoe pair is valued at $8 and jackets at $20 based on comparable thrift listings. Maintain the charity receipt, a photo, and a short spreadsheet noting each item, FMV source, and total value.
- Furniture: A used couch you purchased new for $1,200 has an FMV of $200 at resale. Document comparable listings (two or three sources), photos, and the charity receipt. If a single item is over $5,000 in claimed value, hire an appraiser.
- Vehicle: You donate a car. The charity sells it at auction for $1,200 and sends you a Form 1098‑C indicating gross proceeds. Your deduction is limited to $1,200 unless the charity used the car in its program; in that case, FMV rules could allow a higher deduction (see IRS vehicle rules).
Recordkeeping checklist (keep with tax records)
- Written acknowledgement from the charity (date, organization EIN, item descriptions).
- Charity receipts or Form 1098‑C for vehicle donations.
- Inventory spreadsheet with item descriptions, quantities, dates, and FMV calculations.
- Photographs of each donated item showing condition.
- Sources used to determine FMV (links, screenshots of resale listings, thrift-store price guides).
- Qualified appraisal report (if required) and Form 8283 (if applicable).
Practical tools and apps
- IRS publications (Pub 526 and Pub 561): official guidance on deductibility and valuing property (irs.gov).
- ItsDeductible and other donation-tracking apps: can speed FMV research and create exportable reports (some apps are paid; read privacy policies).
- Spreadsheet templates: build a reusable template with columns for item, condition, FMV, source, charity, and receipt file name.
Common mistakes donors make
- Claiming original retail price instead of FMV: Donors often overstate value; FMV is what matters.
- Lacking contemporaneous written acknowledgement: Without a receipt or written statement, the IRS may disallow the deduction.
- Ignoring Form 8283 rules: Not filing Form 8283 for >$500 in noncash contributions is a common oversight.
- Relying on vague estimates instead of documenting comparable sales or getting appraisals when necessary.
Audit red flags and how to reduce risk
- Very large noncash deductions with little documentation. If your claimed values are unusually high relative to typical FMV for the item class, expect scrutiny.
- Missing receipts or late acknowledgements. Ask for and keep the charity’s written confirmation at the time of donation.
- Numerous high-value items without appraisals. For items > $5,000, use a qualified appraiser and attach Form 8283, Section B.
When to consult a professional
- You plan to donate a vehicle, artwork, or other high-value items (> $5,000).
- You are donating inventory or business property — different tax rules apply and may allow a special deduction for corporations (see related guidance: “Charitable Donations of Inventory Deduction”).
- You’re unsure how to value rare or unique items such as artwork or collectibles.
For more on documenting donations and the IRS substantiation rules, see our guide on documenting charitable contributions: Documenting Charitable Contributions: Receipts, Substantiation, and IRS Rules. For a short how-to on preparing IRS-ready documentation, see How to Document Charitable Deductions for the IRS.
Professional tips from practice
- Photograph everything before donation and then again when you drop it off. Time-stamped photos on your phone are often the quickest proof of condition.
- Use a running spreadsheet during the year rather than reconstructing donations at tax time.
- For frequent donors, consider a donor-advised fund (DAF) to bunch contributions and get a single receipt for multiple items while controlling timing.
- Keep a folder in your email for charity acknowledgements and PDFs of appraisals; make backups in cloud storage.
Legal and tax references
- IRS Publication 526, Charitable Contributions: https://www.irs.gov/pub/irs-pdf/p526.pdf
- IRS Publication 561, Determining the Value of Donated Property: https://www.irs.gov/pub/irs-pdf/p561.pdf
- Form 8283, Noncash Charitable Contributions: https://www.irs.gov/forms-pubs/about-form-8283
- Form 1098‑C, Contributions of Motor Vehicles, Boats, and Airplanes: https://www.irs.gov/forms-pubs/about-form-1098-c
Final notes and disclaimer
This article explains general rules for tracking charitable deductions when donating goods and references current IRS publications as of 2025. It is educational and not personalized tax advice. For complex situations, unusually large donations, or business-related contributions, consult a certified tax professional or CPA to confirm how the rules apply to your return.
