Best practices for entering non-cash charitable donations? What tools do preparers use to determine thrift shop value?

[paul7]

This is my first year as an EA doing taxes a paid preparer using PTO.  In TurboTax, they have the It'sDeductable Tool which helps log the details of each Goodwill donation (for example) to determine its Thrift Shop value. I was hoping at ProConnect Tax Online would have a similar tool, but it doesn't.   What do other preparers do in situations where the taxpayer brings in, for example, 8 separate Goodwill donations with a list of everything that was donated? Do they have the taxpayer determine the value of each item themselves, or is there a process or program they use to help the taxpayer log each item and determine its value? Any advice is much appreciated. Thank you!

[JOFI]

I always clearly communicate to the client they are responsible for estimating the fair market value of their non cash charitable contributions. If pressed, I ask them to estimate the value they could receive if they had sold the good at a thrift market. I also remind them they should be comfortable defending this value in the event of an IRS audit.

You are only asking for trouble if you take it on yourself to estimate this value on behalf of the taxpayer. This is their job, not yours.

[George4Tacks · Accepted solution]

It is the responsibility of the taxpayer to support the claims that they want to put of the tax return. https://itsdeductibleonline.intuit.com/ is still available and is definitely a good starting point. The preparer seldoms gets to see the goods donated, so it is very hard for him (or her) to determine their value. Our experiences and knowledge lead us to possibly question some items presented to us, but we are not the auditors. 

Personally I point the client to https://itsdeductibleonline.intuit.com/ or a short version sheet that is printable, such as in Tax Tools https://www.taxtools.com/products_tt.aspx Which is my go to support product for many things. 

[itonewbie]

Your client should be providing the valuation and a quick Google search will find plenty of guides out there, many from charities that accept non-cash donations.  Here're a few examples:

https://salvationarmysouth.org/valueguide-htm/

https://www.ccmaine.org/docs/Thrift%20Store/ThriftStore_ValuationGuide_7_19.pdf

https://www.goodwill.org/wp-content/uploads/2010/12/donation_valuation_guide.pdf

[Ernie]

I provide the client a page from The Tax Book which has estimated used values and tell them to document their items.

Dusty

This forum is not for only Professionals or those who use Intuit products.  The answers you receive may have been provided by someone with no experience – maybe someone who uses H&R Block software.  Who knows.