October 6, 2005

DONATING YOUR OLD STUFF

One of the benefits of being a member of the National Academy of Elder Law Attorneys (NAELA) is something called the list-serve. The list-serve is a computerized question and answer service available to all NAELA attorneys and is accessed through my computer. I am able to post elder law questions to our roughly 550 Massachusetts members and see what they say.

Attorney Tim Loff posted a question asking for the names of organizations that accepted household items, the owner of the home had died. Here’s a summary of the responses and if you know of an organization that is not listed, let me know. I’ll add it to the list.

CHARITABLE ORGANIZATIONS THAT ACCEPT HOUSEHOLD ITEMS

1) Epilepsy Foundation – They accept used clothing and can be reached toll free at 888-576-9996 or at their website, epilepsyfoundation.org/local/massri/clothingdonation.cfm

2) The Pine Street Inn – The Pine Street Inn gratefully accepts clothing, shoes and jackets for men, women and children in all sizes. They will also accept donations of furniture, household goods, large and small appliances, electrical equipment, and linens. By law, they are unable to accept mattresses and box springs but do accept bed frames. All donations are asked to be in good, sturdy, working condition. To arrange for pickup of large items, or for more information, please call (617) 983-5686.

3) Salvation Army – Donations of previously used clothing, furniture and other items. Donations may be dropped off at any Salvation Army location. Pick-ups may be arranged by calling 1-800-958-7825.

4) MA Homeless Alliance – Furniture only that is in good condition. No sleeper sofas. Please call (617)737-3508

5) Morgan Memorial/Goodwill – Accepts clothing, shoes, accessories, books, toys, and small working appliances and computers. THEY DO NOT PICK UP. Call 1-800-664-6577

6) Vietnam Veterans of America – This organization takes almost anything and they pick-up. They operate in Essex, Middlesex, Norfolk, Plymouth and Suffolk Counties and can be reached at 800-775-8387.

7) Big Brother/Big Sister – They accept all types of clothing and small reusable household items, such as dishes, linens, small appliances, toys, books and small furniture (capable of being picked up by one person). They pick up and can be reached at 800-483-5503 or www.bbsfoundation.org.

Did you know that you could claim a charitable deduction on your income tax return for having made a gift to these charities? Trying to figure the value of the items you give to charity can be difficult. After reading about 50 pages in IRS publications NO. 526 and No. 561, dealing with charitable contributions, my conclusion is that there is very little guidance to determine what used goods are worth. When it comes to used household goods and clothing, the IRS says, “these items are usually worth far less than the price you paid for them”.

If you are going to claim a charitable income tax deduction for clothing and household goods you need to keep good records. You should keep the following for each item that you are giving away:

1) How you got the property, for example, by purchase, gift, bequest, inheritance of exchange.

2) The approximate date you go the property, and

3) The cost of the property.

4) Description of the property with a good faith estimate of it’s value.

For most people, keeping track of how much they paid for a sweater and the date of purchase is not practical. If, however, you just inherited your aunt’s house and all of the contents, making a list of all the items given away can lead to a large income tax deduction. You should seek the advice of a competent tax advisor if you are going to claim a large tax deduction

If the Joint Committee on Taxation has their way, this deduction will soon be gone. There is a proposal that would limit the charitable deduction for household goods to $500 per year, no matter how much you give away. They estimate that the government would save 1.9 billion dollars if this limit were in place. This follows last year’s crackdown on aggressive taxpayers that were deducting the fair market value of automobiles, boats and planes donated to charities. The change that took place in 2004 limits your deduction to what the amount the charity receives when they sell your old vehicle.

Thanks to the Internet there is more than one way to get rid of your old “stuff” that’s taking up room in your house and garage. You could choose to sell it on Ebay, an Internet auction site. If you are not computer savvy, you can still use Ebay through a new type of store that takes your unwanted items and gives you a percentage of what they are able to sell it for on Ebay. One new company that has started doing this is Net2Auction. This company has started in California and has 50 locations there. I assume before too long we will have locations in Massachusetts.

This article gives general information and not specific advice on individual matters. Persons wanting individualized advice on matters discussed should contact an advisor experienced in those matters. To the extent this article provides information on legal matters, it is based on law in effect in Massachusetts on the date of posting (laws in effect in other states are often quite different).

Ronald H. Surabian is a CPA and attorney who works at the Elder Law Center in Saugus, Massachusetts. He also holds masters in accounting and a masters in tax law. He currently serves on the board of directors of the Massachusetts Chapter of the National Academy of Elder Law Attorneys. If you have any questions please call me at the Elder Law Center, One Essex Street, Saugus, MA 01906 (781)233-4444. To view this or any prior article, please visit our web site at www.elderlawcenter.org

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