Booklet helps determine value of charity gifts

Most of you have probably gathered up your gently worn but slightly dated clothing and shoes, placed them in a plastic bag and taken them to the nearest thrift store or charity.But have you ever taken money, folded it up, placed it in a plastic bag and given it to the thrift store?Well, if you've donated clothing, household items, etc., without determining their fair market value, it's just like handing over money along with the donated item. That's because the Internal Revenue Service allows you to deduct the value of the donated items on your tax return.However, every year, people give clothing, shoes, toys and appliances to charity, get a receipt but have no idea how to estimate the value of their donation. Therefore, when tax time rolls around, they can't deduct it.It's a scenario Nebraska-based CPA Bill Lewis was all too familiar with, and it's what led to the creation of his book "Money for Your Used Clothing." The guide lists values for more than 700 items of clothing and household goods commonly donated to charity."Back in the late '80s, I was doing tax returns for clients," Lewis said. "One area that was difficult to come up with for my clients was a valuation for used clothing."While his clients had donated bags of clothing to charity, they couldn't remember exactly what they had donated nor what the donation was worth.Lewis decided to put together a valuation guide that would help his clients follow the IRS guidelines for assigning fair market value to their donations. His first book was published in 1990 for his clients, but over the years people all across the country learned about it via articles in USA Today, Kiplinger's, Money magazine and the Wall Street Journal.To claim the donated items as a deduction, taxpayers must itemize them on their tax return, have a signed dated receipt from the charity and a detailed description of the fair market value. The book, which is updated every year, includes values for household items, small and large kitchen appliances, furniture, sporting equipment, and men's, women's, boys', girls', toddlers' and infants' clothing items."Our system, trade secret, is that we survey consignment and thrift shops across the U.S. and take the representative value for those items," Lewis said.He said people have written him to say that they've been able to get more money by donating their items and taking the deduction rather than by selling them at a garage sale.The $25 booklet guarantees that taxpayers who itemize will save at least $250 on their income tax return or his company, Certified Used Clothing Values Inc., will give them their money back. Mr. Lewis' company also promises to pay any interest and penalties if the IRS disallows the deduction.He said there have been 10 cases in which the IRS initially challenged the deductions but later reinstated them. "As long as we showed them the support and it wasn't a guess, they were very content," he said.What's it worth?Here are some examples from "Money for Your Used Clothing" of what donated items are worth, providing they are in good condition:Women's dress -- $13Men's suit -- $35Boy's jean -- $8Girl's sneakers -- $12Luggage set -- $10E-mail Monica Haynes at mhaynes(at)post-gazette.com(Distributed by Scripps Howard News Service, www.scrippsnews.com.)