The IRS allows taxpayers with a charitable inclination to take a deduction for a wide range of donated items. The IRS provides specific guidelines for those taxpayers contributing non-cash items. These cover the type of charity you can donate to, the quality of the goods that may be contributed and how to value them for deduction purposes. If you have set aside clothes and other items for charity, and you would like to know how to value these items for tax purposes, read on.

Household items that can be donated and for which a deduction is allowed, include:

• Furniture and furnishings;
• Electronics;
• Appliances;
• Linens; and
• Other similar items.

The following are not considered household items for charitable deduction purposes:

• Food;
• Paintings, antiques, and other art objects;
• Jewelry; and
• Collections.

Valuing clothing and household items

Many people give clothing, household goods and other items they no longer need to charity. If you contribute property to a qualified organization, the amount of your charitable contribution is generally the fair market value (FMV) of the property at the time of the contribution. However, if the property has increased in value since you purchased it, you may have to make some adjustments to the amount of your deduction.

You cannot deduct donations of used clothing and used household goods unless you can prove the items are in "good," or better, condition; and in the case of equipment, working. However, the IRS has not specifically set out what qualifies as "good" condition.

Fair market value is the amount that the item could be sold for now; what you originally paid for the clothing or household item is completely irrelevant. For example, if you paid $500 for a sofa that would only get you $50 at a yard sale, your deduction for charitable donation purposes is $50 (the sofa's current FMV). You cannot claim a deduction for the difference in the price you paid for the item and its current FMV.

To determine the FMV of used clothing, you should generally claim as the value the price that a buyer of used clothes would pay at a thrift shop or consignment store.

Note: In the rare event that the household item (or items) you are donating to charity has actually increased in value, you will need to make adjustments to the value of the item in order to calculate the correct deductible amount. You may have to reduce the FMV of the item by the amount of appreciation (increase in value) when calculating your deduction.

Good faith estimate

All non-cash donations require a receipt from the charitable organization to which they are donated, and it is your responsibility as the taxpayer, not the charity's, to make a good faith estimate of the item's (or items') FMV at the time of donation. The emphasis on valuation should be on "good faith." The IRS recognizes some abuse in this area, yet needs to balance its public ire with its duty to encourage legitimate donations. While the audit rate on charitable deductions is not high, it also is not non-existent. You must be prepared with reasonable estimates for used clothing and household goods, high enough so as not to shortchange yourself, yet low enough to prevent an IRS auditor from threatening a penalty.

In any event, if the FMV of any item is more than $5,000, you will need to obtain an appraisal by a qualified appraiser to accompany your tax form (which is Form 8283, Noncash Charitable Contributions). When dealing with valuables, an appraisal helps protect you as well as the IRS.

For more information on this topic, contact your Kiesling representative.

During these stressful times, remember to celebrate the small stuff and focus on what you can influence.

You may be under a lot of stress now due to the FCC order and all the related uncertainties. You may also be working hard to get your books closed and prepare for that annual audit. These can definitely be stressful times.

Now might be a good time to explore what your stress reducers are. Maybe it is an evening away from home going to visit family. Maybe it is baking or picking up the house. Maybe it means making yourself just sit and relax, whether it be watching television or reading a book. Whatever it is, it is not going to work very well unless you truly get your mind off work. There has to be a line drawn somewhere so you can take a break from your work concerns. You need a healthy balance. It is also important to remember to give yourself a break. Getting your mind off work for even the shortest while will help more than you realize.

You may not be able to do everything yourself, so if it is possible to delegate, do it! It is challenging to let someone else do things when they probably won't do it the way you would have done it, but if you need to lighten your load, consider delegating.

If you start feeling negative, turn that into motivation. Celebrate the small successes, whether it is getting an account reconciled, closing the books, or understanding a single part of the FCC order a little better. It is important to understand what you can influence and not let what you can't change bother you too much. Focus on what you can affect! Educate yourself - the more you know, the more at ease you will feel and can focus on the most important areas.

And if all else fails, daydream about where you are going on your summer vacation and use that as your driving force to success in the next couple months!!!

PURPOSE

"Nourish the mind like you would your body. The mind cannot survive on junk food."

                                                           Jim Rohn

"Set peace of mind as your highest goal and organize your entire life around it."

                                                            Brian Tracy

"Show me someone who has done something worthwhile, and I'll show you someone who has overcome adversity."

                                                             Lou Holtz

"Happiness comes when you believe in what you are doing, know what you are doing, and living what you are doing."

                                                             Brian Tracy

"Sharing makes you bigger than you are.The more you pour out, the more life will be able to pour in."

                                                            Jim Rohn