Multiple donations to Goodwill of clothing and household items that total over $5000

[saboyercpa]

I have a client who has made 18 donations to Goodwill for clothing and household items.  Each donation has been under $2500 but the total for all of them is $14,000.  Am I correct that you need to aggregate all of the donations as if they are one and get an appraisal?  

[sjrcpa]

Are you really buying that their crap (used stuff) is worth $14K?

If yes they need an appraisal.

Or they could deduct less than $5K.

[abctax55]

Hard to get an appraisal after the fact/after all the donation 'bags' be gone...

[sjrcpa]

Yep.

[saboyercpa]

This client is a new client.  Their prior CPA has been deducting these noncash donations for years even though the total has been over $5000.  They have put it in Section A on Form 8283 instead of Section B.  They show multiple donations under $2500 to Goodwill and put it under Clothing and Household Items.  I can't believe they have never been audited especially since the clients are physicians.  

[sjrcpa]

We all see some surprising things when we get new clients.

You get to explain the rules to them.

[IRonMaN]

We had a lady come in with a mitt full of donation slips a number of years ago.  She had been doing it for years deducting obscene amounts.  We explained the rules and explained that we don’t play that game.  Not surprisingly, she isn’t a current client.

[qbteachmt]

Have them list a bunch of the most valuable items and have them (or you) use It's Deductible. It will help them see the "worth" of the stuff they gave away. Just a few of the big ticket items should help you and them do a validity check on their stuff.

[saboyercpa]

I am trying to see if you can group clothing together and group household items together and deduct each of them at $4999.  I thought maybe that is what the prior CPA was doing.  Or it could be that he is just completely clueless.  

[IRonMaN]

"Or it could be that he is just completely clueless"

Not all CPAs are created equal.  If some us us were surgeons instead of CPAs, there would be a lot more names showing up in the obituaries every morning.

[qbteachmt]

I am certain that two listings at $4,999 won't look at all suspicious...

https://www.irs.gov/pub/irs-pdf/i8283.pdf

"Similar Items of Property" is defined there.

And the Goodwill FMV per clothing item is running about $5 each. That means they gave at least 1,000 items of clothing, which I guess would be annually for a family of, oh, maybe 12 or so kids, because kids grow out of stuff and no one in the family wants hand-me-downs? Even a bike or computer desk or coffee table or microwave are $10. And a general rule is 30% of what you paid new. That means they give away $42k of stuff every year? Whew; I want to be at their next yard sale.

[saboyercpa]

Apparently, they have been doing it this way for years and the prior CPA never had a problem with it.  I am surprised they have never been audited.