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What is the opinion of TaxACT Donation Assistant values?

For example for long sleeve women's shirts it uses a $9 value if in good condition and $14 in better condition.
For an old exercise bike with a computer $75 even in "good" condition. $75 for a 10 year old bike??

My wife probably paid $10-15 for a new shirt, she gets this stuff on sale a lot, I don't think I should say its worth $14 used. I thought a fair market value for donation to charity was about 25% of what it would cost new or more like $3-$5 range.

I don't want to say the trunkful of stuff I dropped off at Goodwill was worth $1,000 when the most we'd get from a garage sale is probably $100 if we sold everything.

What's the opinion on this board? I wonder if TaxACT is a little on the aggressive side to get more business since people see "I could get a bigger refund if I use TaxACT" ??

Post by Steelersfan » Mon Feb 08, 2010 5:42 am

I use a median value from this chart from Goodwill and nudge it up or down a bit based on condition.

For shirts, the median value is less than what you are getting from TaxAct.

Post by caklim00 » Mon Feb 08, 2010 7:41 am

I would just use the values given to me through the program. If you ever get audited then you have a good reason for the values you chose. Would you feel better using this value or some made up number? I would feel much better using the former.

Post by metalman » Mon Feb 08, 2010 8:50 am

I personally would have no problem using the software's estimates. Since they offer free preparation and audit support, I would also try to get a confirmation from them that they back it up. Even if the IRS disallowed it, you would have a strong case to avoid any penalties and very worse case pay only interest.

Post by caklim00 » Mon Feb 08, 2010 9:07 am

metalman wrote: I personally would have no problem using the software's estimates. Since they offer free preparation and audit support, I would also try to get a confirmation from them that they back it up. Even if the IRS disallowed it, you would have a strong case to avoid any penalties and very worse case pay only interest.

Post by mikep » Mon Feb 08, 2010 9:33 am

Steelersfan wrote: I use a median value from this chart from Goodwill and nudge it up or down a bit based on condition.

For shirts, the median value is less than what you are getting from TaxAct.

Thanks, the problem with this stuff is it's so vague. $5-150 for a printer to good will? Of course they want to give a wide range.

I think I have to use my gut feeling. If anyone used the TaxACT values that were disallowed in an audit that would definitely tilt me to avoid them. Some of the values I have a hard time believing, such as $14 for a shirt that we paid $10 new for.

Maybe a more generic $100/trash bag of clothes (~25 pieces) would be better, especially for receipts where I did not take the time to write down individual items (which I'm paying for now).

Greg@TaxACT: Does TaxACT stand behind it's Donation Assistant numbers and offer to pay penalties/interest if disallowed? I could not find this guarantee anywhere, only guarantees for calculation errors. http://www.taxact.com/company/company_aguarantee.asp

Post by Greg@TaxACT » Tue Feb 09, 2010 9:41 am

The values for our donation assistant are provided by CUCV (Certified Used Clothing Values, Inc.)

The values are guaranteed by CUCV in the event of an audit. You can find full information on the Audit Protect Guarantee here: http://www.mfyuc.com/audit_protection.asp

Let me know if you have any other questions.

Post by Steelersfan » Tue Feb 09, 2010 9:56 am

That seems like a good source of donation values, but just to be clear, CUVC's guarantee only covers interest and penalites, not the difference in what the IRS accepts and what you submitted. From the CUVC web site:

"If the IRS makes an adjustment to the certified market values published in our booklet, we will pay all interest and penalties associated with the used clothing values overstatement."

I guess that's reasonable and is more than you'd get if you use the Goodwill information.

Post by caklim00 » Tue Feb 09, 2010 10:09 am

Steelersfan wrote: That seems like a good source of donation values, but just to be clear, CUVC's guarantee only covers interest and penalites, not the difference in what the IRS accepts and what you submitted. From the CUVC web site:

"If the IRS makes an adjustment to the certified market values published in our booklet, we will pay all interest and penalties associated with the used clothing values overstatement."

I guess that's reasonable and is more than you'd get if you use the Goodwill information.

Post by livesoft » Tue Feb 09, 2010 10:30 am

My spouse does volunteer work in a thrift shop. Most donated clothes are too dirty or worn out and are tossed. I think they may get 25 cents per pound when these are sold to a bulk distributor. I think the bundles get shipped in empty cargo vessels to Africa.

The nicer stuff goes on the rack for re-sale. I bought a very nice sport coat for $7. Somebody probably deducted $50 for it on their taxes.

Post by mikep » Tue Feb 09, 2010 10:56 am

Greg@TaxACT wrote: The values for our donation assistant are provided by CUCV (Certified Used Clothing Values, Inc.)

The values are guaranteed by CUCV in the event of an audit. You can find full information on the Audit Protect Guarantee here: http://www.mfyuc.com/audit_protection.asp

Let me know if you have any other questions.

Thanks Greg, that looks pretty reasonable, as usual I see guarantees cover penalties/interest only. However, it looks like they only guarantee if you bought the booklet through them? Does the guarantee extend to TaxACT users? If so please show me the fine print. Now do you have any stats on if these values have ever been disallowed in an audit? Thanks again!

I also have some stuff that unfortunately did not write details. Was a spur of the moment "lets take this to goodwill" and I didn't have time to record details (my fault I know). I'm thinking $50/trash bag is reasonable, as each bag had at least 10-15 pieces of clothing.

Post by Greg@TaxACT » Tue Feb 09, 2010 2:22 pm

Certified Values agrees to grant one audit protection in Certified Value’s name and at its expense to all registered users of 2nd Story for all customers who have purchased the Deluxe product. In the event that 2nd Story determines a User is audited as a result of Certified Values’ non-cash donation valuations, Certified Values agrees to make available to said User its one year Audit Protection Guarantee, specifically:

1. A maximum of $5,000 in non-cash donation deductions per Tax Year

2. Said Guaranty shall be good for three years from the date the User files the income tax return

Turns out that the faq for this isn't finished yet, it should be up soon, but here's the guarantee extended from CUCV to TaxACT users.

Post by mikep » Tue Feb 09, 2010 2:34 pm

Certified Values agrees to grant one audit protection in Certified Value’s name and at its expense to all registered users of 2nd Story for all customers who have purchased the Deluxe product. In the event that 2nd Story determines a User is audited as a result of Certified Values’ non-cash donation valuations, Certified Values agrees to make available to said User its one year Audit Protection Guarantee, specifically:

1. A maximum of $5,000 in non-cash donation deductions per Tax Year

2. Said Guaranty shall be good for three years from the date the User files the income tax return

Turns out that the faq for this isn't finished yet, it should be up soon, but here's the guarantee extended from CUCV to TaxACT users.

Greg,
This looks confusing - is it a one year or three year guarantee? Also, since IRS can audit up to 3 years after the April 15 deadline that's what it should be instead of 3 years from the file date.
Thanks,
Mike

Post by Greg@TaxACT » Tue Feb 09, 2010 3:26 pm

I believe the "one year" refers to the individual tax year. The values change every year, so they guarantee those values only for a specific tax year (i.e. the values in the 2009 book are guaranteed for 2009 returns only, if you use the 2009 values for your 2010 return, they would not be guaranteed).

As to the three years, I'll have to verify with our accountants, but I believe that IRS has 3 years from the date the return is filed to launch an audit for any reason. After that they have 3 more years to launch an investigation if they believe you've underreported your income by 25% or more.

I'll double back with our accountants just to make sure.

Post by mikep » Tue Feb 09, 2010 10:02 pm

Thanks Greg for helping! Maybe its my mistake.

I have used TaxACT every year since 2003 and grateful for the service it provides for only $13.95 including state, including e-file, including donation assistant and including rolling over my info from last year

Post by runner26 » Tue Feb 16, 2010 9:19 am

Last year TaxAct printed out a list of the individual items I entered into the Donation Assistant, not just the Tax Form listing who/when/total donation. I found this handy. I cannot find anywhere this year a function that would produce this list.

Post by caklim00 » Tue Feb 16, 2010 9:31 am

runner26 wrote: Last year TaxAct printed out a list of the individual items I entered into the Donation Assistant, not just the Tax Form listing who/when/total donation. I found this handy. I cannot find anywhere this year a function that would produce this list.

You can still do this in TaxAct Donation Assistant.

For those interested I've started a post where I've done a test of ItsDeductible vs. DeductionPro, and trying to test Donation Assistant as well: http://www.bogleheads.org/forum/viewtop . 1266278799

In the end, I'm estimating my return will be at least $200 more due to donation tool used.

Post by runner26 » Tue Feb 16, 2010 10:20 am

runner26 wrote: Last year TaxAct printed out a list of the individual items I entered into the Donation Assistant, not just the Tax Form listing who/when/total donation. I found this handy. I cannot find anywhere this year a function that would produce this list.

You can still do this in TaxAct Donation Assistant.

For those interested I've started a post where I've done a test of ItsDeductible vs. DeductionPro, and trying to test Donation Assistant as well: http://www.bogleheads.org/forum/viewtop . 1266278799

In the end, I'm estimating my return will be at least $200 more due to donation tool used.

Thanks, OK, I see it now. You have to print each donation event separately.

It would be a nice enhancement to be able to print a complete list with one click, and be able to print the donation list to a PDF as the software allows with forms and worksheets.

Post by mikep » Tue Dec 28, 2010 2:06 pm

Greg@TaxACT wrote: The values for our donation assistant are provided by CUCV (Certified Used Clothing Values, Inc.)

The values are guaranteed by CUCV in the event of an audit. You can find full information on the Audit Protect Guarantee here: http://www.mfyuc.com/audit_protection.asp

Let me know if you have any other questions.

Greg,
Just checking if the same guarantee applies this year? The link you reference is broken and I can't find any audit guarantee this year. I'm cleaning out my closets this week and plan to donate some clothes before Friday. I came across this in TaxACT software:

If the total of the donated items is over $500, you must include the following information:
Date Acquired: (mm/dd/yyyy or "various")
How Acquired: (examples - purchase, gift, or inherit)
Donors Cost: (Enter dollar amount)

I have no idea how much things cost from my closet. What proof is required here? I'm thinking about putting "various", "purchase" and cost of about 3-4x of the amount of the deduction. opinions please.