• Page :
  • 1
  • Text Only
Voting History
rated:
We just had a yard sale and as usual it's so much work for so little money.
So my question is: at what point does the write off for donating things like household goods and clothing become more valuable than the revenue from a yard sale?
For instance, how many bags of stuff, at, say, a $50. receipt per bag, do I have to donate to equal, say, making $100. from a yard sale if I'm somewhere near the 28% tax bracket.
Can I reason it out this way, taking the $500 limit into consideration, and any other factors I might not be thinking of?
Thanks.

Member Summary
Most Recent Posts
I agree; spreading out your donations makes itemizing easier. My wife and I have a running donation pile for our clothi... (more)

munkyxtc (Aug. 24, 2011 @ 11:55a) |

My development usually has a community yard sale every year - my thought is usually to drag stuff out that day, if I sel... (more)

MadAnthony (Aug. 24, 2011 @ 1:22p) |

Garage sales are hugely successful in Arizona, we have Sonorans driving up from Mexico picking up everything they can. F... (more)

UAIron (Aug. 26, 2011 @ 1:45p) |

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.
  • Also categorized in:
Thanks for visiting FatWallet.com. Join for free to remove this ad.

This sounds like a middle school math problem.

X*$50*0.28 = $100

Solve for X.

Typically, we use Craigslist for the things we can get more than about $50 for, and donate the rest.

Eh. If, as you note, the ROI is so low, seems you'd rather take the deduction no matter what. Yard sales, IMO, are great for buyers who have the time/enjoy the hunt and can spot something that might be a good resale on eBay/CL. From a seller's perspective, seems like a pretty crappy way to spend a Saturday morning/afternoon. Of course, that's just from an enjoyment/time-cost perspective, and just IMO.

You should reason it regarding the value of your time. How many hours go into a yard sale as opposed to just throwing your stuff in boxes/bags and donating it (or auctioning it if there is that kind of value).

Use one of the deduction softwares from tax-prep software companies and the $50 bags of stuff quickly become $300 bags of stuff. If you are valuing your items at $50 a bag, you are probably shorting yourself from what you could claim.

I normally tune down their estimates of value (because I don't think our stuff is worth what their average sales data show it is worth), but even then the estimates provided are far higher than what I used to claim (which was in line with your $50/bag method).

For us, it would never pay to have a garage sale again.

Do you itemize already? Or take the standard deduction on your taxes?

This will affect your analysis.

I've been meaning to write a similar post for a while. Around here, consignment stores are very popular. I see three options:

-"Easy" consignment: Drop off a box of stuff, get about 35% of the selling price set by store, take back unsold stuff.
-"Hard" consignment: Clean, iron, hang, tag, get about 75% of the selling price set by me, take back unsold stuff.
-Donate: Charity picks up the box of stuff, get 25% of "market value" determined by me off taxes.

Donating is much less hassle and ends up being about the same value.

We have community yard sales about once a year. For us, it is an opportunity to purge, and we end up clearing $500 to $1000. We use that for some upgrade in the house, purge a bunch of junk and get a new TV or something like that.

IMO, it takes me way too much time to go through bags and bags of clothing and put together spreadsheets for a tax deduction. I'd much rather put it out in the yard for sale and be done with it.

Also, we enjoy the yard sale. It is a social event, meet a lot of people, see your neighbors, that kind of thing. If you don't enjoy it, bag up the crap and drop it off.

If I have some kids clothes that are in really great shape and name brands I will consign them.

If I have a lot that makes sense I will Craigslist it.

Some household items I will Craigslist if I just have a few and they are likely to bring in some money.

Otherwise, it all goes to Goodwill. I just write down "10x boys t-shirts, average condition", "2x boys shoes, average condition", etc. It's pretty easy and since I itemize already it makes sense.

I don't concern myself with the $500 limit, I submit the line-item schedule every year.

Donating is best for me as they let you determine the value. The Salvation Army gives you a receipt indicating the number of bags but not the size of the bags. I wised up after I brought in 3 contractor size garbage worth of clothes and another donor brought in small grocery store bags of clothes.

Guess who got to claim the bigger deduction.

It all depends on if you have a HP Touchpad to sell at your yard sale. If you do it makes a big difference.

There was a similar thread a few months ago in which I asked the same question (but wasn't the OP) - The main focus of that discussion is how to track/itemize/prove what you donated (and estimated value) so as to avoid an IRS audit. Wish the FW search wasn't such a #$@#@ today..

Use smaller bags.

Logan71 said:   There was a similar thread a few months ago in which I asked the same question (but wasn't the OP) - The main focus of that discussion is how to track/itemize/prove what you donated (and estimated value) so as to avoid an IRS audit. Wish the FW search wasn't such a #$@#@ today..

You mean this one?

Craigslist it if it has some value. If not, donate it to charity. I know some people who donate to goodwill, get a receipt, and give the rest of the year to homeless shelters (many are in need of children's items!). Since goodwill does not itemize the receipt, so one could add it all on to that receipt.

maxfleischer said:   Logan71 said:   There was a similar thread a few months ago in which I asked the same question (but wasn't the OP) - The main focus of that discussion is how to track/itemize/prove what you donated (and estimated value) so as to avoid an IRS audit. Wish the FW search wasn't such a #$@#@ today..

You mean this one?


Yes, that would be it. Your FW Google-Fu is strong

LOL!

Save time and stress from haggling idiots and donate everything (stretch your donations out throughout the year).

Oh, the answer to the middle school math problem is 7.14.

erinm said:   ...
Otherwise, it all goes to Goodwill. I just write down "10x boys t-shirts, average condition", "2x boys shoes, average condition", etc. It's pretty easy and since I itemize already it makes sense.

...


IRS Pub 526, Charitable Contributions, states:

"Clothing and Household Items

You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. "

So average condition is kind of nebulous for a valid deduction.

If you're in a 28% tax bracket then most stuff will be easier and probably net you more to just donate and take a reasonable deduction.

There are some exceptions for higher priced products but for those you can probably sell em easier on Craigslist individually.

If your'e in a lower tax bracket and/or you don't itemize then a yard sale may be more worth your time.

frugalpete said:   erinm said:   ...
Otherwise, it all goes to Goodwill. I just write down "10x boys t-shirts, average condition", "2x boys shoes, average condition", etc. It's pretty easy and since I itemize already it makes sense.

...


IRS Pub 526, Charitable Contributions, states:

"Clothing and Household Items

You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. "

So average condition is kind of nebulous for a valid deduction.




Average condition is good condition. We're not grading diamonds here. Its either good enough to resell at a thrift store or a rag.


The IRS is not going to balk at the use of the word 'average' to describe your used t-shirts and shoes.

jerosen said:   frugalpete said:   erinm said:   ...
Otherwise, it all goes to Goodwill. I just write down "10x boys t-shirts, average condition", "2x boys shoes, average condition", etc. It's pretty easy and since I itemize already it makes sense.

...


IRS Pub 526, Charitable Contributions, states:

"Clothing and Household Items

You cannot take a deduction for clothing or household items you donate unless the clothing or household items are in good used condition or better. "

So average condition is kind of nebulous for a valid deduction.



Average condition is good condition. We're not grading diamonds here. Its either good enough to resell at a thrift store or a rag.


The IRS is not going to balk at the use of the word 'average' to describe your used t-shirts and shoes.


i wouldn't rely on IRS interpreting average as good.

average = C
good = B

jerosen said:   If you're in a 28% tax bracket then most stuff will be easier and probably net you more to just donate and take a reasonable deduction.The implication is that the "reasonable deduction" exceeds the amount you would get at a yard sale. For example, if a shirt sells for a dollar at a yard sale, but you would assign a value of $5 if you were to donate it, then you would be better off donating it. Of course, one could argue that your valuation for the donated shirt should only be a dollar, but hey, what's a little tax fraud between friends?

dcwilbur said:   jerosen said:   If you're in a 28% tax bracket then most stuff will be easier and probably net you more to just donate and take a reasonable deduction.The implication is that the "reasonable deduction" exceeds the amount you would get at a yard sale. For example, if a shirt sells for a dollar at a yard sale, but you would assign a value of $5 if you were to donate it, then you would be better off donating it. Of course, one could argue that your valuation for the donated shirt should only be a dollar, but hey, what's a little tax fraud between friends? This bothers me too. If the most you could get for selling an item is $X and you could claim a deduction of $X for donating the item to charity, one would always come out ahead selling the item.

The one thing to keep in mind is that the fair market value for the deduction is based upon the highest and best use. Generally, the yard sales prices are not going to get you the best price. Items are priced to sell quickly and with little effort. That would explain why a person could deduct more when donating to charity than they could easily get selling the same item.

theman2 said:   The one thing to keep in mind is that the fair market value for the deduction is based upon the highest and best use.You are using terms that usually apply to real property appraisals, not shirts. I know what the "highest and best use" is for a shirt, but I'll be damned if I can think of any OTHER uses! If you think that the Goodwill store is getting more for your shirt than you could get at your yard sale, you're kidding yourself. This fast and loose approach is why the IRS clamped down on the vehicle donation scam. "Let's see, should I sell this old piece of crap car for $500 or donate it to the disabled vets and take a $5,000 deduction?"

Didn't this issue cost Bill Clinton a little in the polls way back when?

dcwilbur said:   If you think that the Goodwill store is getting more for your shirt than you could get at your yard sale, you're kidding yourself.

Actually, having visited a thrift store recently, I was surprised at how high their clothing prices were. Average of $5-6 for shirts and $8-10 for pants, and for stuff no better (and in many cases worse) than what I've sold at yard sales.

I think the difference is they don't have a need to try to move as much inventory as possible in one afternoon.

Do you have kids who have nothing better to do than sit in the hot sun and haggle over the value of your old toaster? If not, do the deduction.

[Q=theman2;16196283This bothers me too. If the most y]ou could get for selling an item is $X and you could claim a deduction of $X for donating the item to charity, one would always come out ahead selling the item.
You are forgetting that you will not sell all your items at a garage sale, whereas you will donate all your stuff.

We've had 3 garage sales and I'd say 1 of them was actually successful. I think we brought in maybe $250, somewhere in there. The last sale we ended up hauling a bunch of stuff to Goodwill. I'd say with clothes, it's worth just donating those and taking the deduction. With other merchandise, we've found that a site like bookoo.com works well. We were able to unload a few things there that never sold at garage sales.

zukemania said:   Save time and stress from haggling idiots and donate everything (stretch your donations out throughout the year).

I agree; spreading out your donations makes itemizing easier. My wife and I have a running donation pile for our clothing that once it becomes noticeable I'll take inventory, bag it up and drop it at the salvation army. Makes the work of itemizing seem much less of a burden.

Oh, and just another general note -- I take pictures of everything I donate; not each piece individually but if I write down 6x Mens polo shirts I'll pile them up and snap a picture of the grouping. I figure that can't hurt if the IRS comes asking questions, especially since last year I ended up writing off several thousand dollars in donations (which was much more than in any previous years).

My development usually has a community yard sale every year - my thought is usually to drag stuff out that day, if I sell anything it's a win, otherwise it's already halfway to my truck, so instead of taking it back in the house it goes into the truck and gets donated to Goodwill the next time I drive past one.

If you have small, high-value items like electronics and don't mind the hassle, eBay is a good way to sell them. Personally, my experience selling things like clothes on eBay has been that it's not worth it, but YMMV if you buy nicer clothes than I do...

Garage sales are hugely successful in Arizona, we have Sonorans driving up from Mexico picking up everything they can. Furniture goes fast, electronics go fast, kitchenware (sets especially) go really fast. Don't expect to get anything for clothes at a garage sale - those are best donated.

We pulled in $1200 in half a day. All from a few signs directing where the sale was, and a craigslist ad.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014