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Originally Posted by sweetana3
(Post 5771373)
Publication 526 gives all the information on donations. Must be a qualified organization. Must be generally the lesser of fair market value or basis which is the $$ amount paid to purchase the materials to make the product and any purchases services like quilting that went into producing the product. Your own time or any appreciation is not counted.
So many forget that the organization must be qualified and it is not fair market value unless it is less than cost. Like clothes donated to Goodwill, it is the lesser value rather than what you paid for them. Stocks and cars have unique implications. Wise to read the Publication for specifics. |
Originally Posted by hsquiltingmom
(Post 5771198)
Hi everyone,
I wondered how many of you make quilts for charity, and also use them for a tax deduction. I would be curious how you decide what to make the value of the donation. I love using my scraps and donating, but it also helps when I can use that for my taxes. Thanks |
I donate quilts through my guild, so I don't claim any deductions.
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I deduct the cost of the material and thread. It is usually warm here, so we don't use batting. My CPA also allows for one sewing machine tune up a year. I do not deduct for sewing machine needles. I do take photos of blankies and dresses made for donation in case I ever need it for the "guh-ment." (Forest Gump)
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According to the IRS person I contacted on this point, (and the Turbo Tax forms), one can use "comparable value". For example, if quilt of mine of similar complexity and size sold for X$, I may use that as the value. USED quilts like used clothing,would be a different thing entirely.
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Save the receipts for all supplies and be sure the receipts are itemized if you plan to use a quilt donation for a deduction. You can't use the wear of machine or power cost to make the quilt unless you file as a business. And the place you donate it to has to be profit making and declare it I think. This is the way it use to be.
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I donate to local Nursing home--little quilts and wheelchair / walker bags...never ever filed a claim. It's called "donation". I believe we should all give back if we've been blessed by.."there, but for the grace of God, go I".
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i make tons of them and have never used them as a deductions, I don't have enough decutionts to claim any
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I haven't tracked my expenses for deduction. I make the charity quilts for my pleasure because I love to make them and have run out of people to give them to.
But that's me. You should consult a tax professional to be sure that you are deducting only what's appropriate and not missing something that you may deduct. |
I think that documentation, as mentioned about saving the receipts, is important. It is also good to have a "thank you" or other note from the non-profit organization, which will be the verification that a donation was actually received from you.
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