You can reduce clutter and get a federal tax deduction at the same time by donating your old laptop to a qualifying charity. In most cases, a used item must be at least in good condition for you to get the benefit. You must meet also fulfill all Internal Revenue Service rules and filing requirements. If you're looking for an excuse to replace your old laptop, this tax deduction may be just the ticket.
If you want a deduction for your laptop, you must give it a charity that qualifies under IRS rules. For example, educational, charitable, religious, literary and scientific organizations normally qualify. The IRS also allows deductible donations to organizations that counter cruelty to animals and children, to veterans' organizations and governments at all levels if your gift is used for the public. You can't deduct gifts to individuals, labor unions, for-profit organizations, political groups or most foreign organizations. Before you donate, ask the organization if it qualifies, or use the exempt organization search tool on the IRS website.
Normally you can take a deduction for used items such as laptops only if they are in "good used condition or better," according to the IRS. You can take the deduction for an item in worse condition only if you get a qualified appraisal for a fair market value of more than $500. Unfortunately, this is a bit steep if you're donating a worn-out old laptop.
Fair Market Value
The IRS defines fair market value as the price you'd get as a willing seller dealing with a willing buyer when both of you know all the facts. For laptops and most household goods, this is usually a lot less than you paid new. Few buyers would pay top dollar for a laptop with outdated technology. If you receive a free meal or other benefit from your donation, you must deduct its value from the market value. Prove how much your laptop is worth by keeping the sales receipt, canceled check, photos or a description from the recipient, as the IRS recommends.
If you want to claim a deduction of $250 or more combined for your laptop and other goods, you must get a written receipt. This receipt should list the name and address of the organization, a description of the item or items and the date of your gift. The receipt must be given at the time of the gift. It must also tell whether you received goods or services in return, and what the value is. If you don't get a receipt for a donation worth less than $250, you must write down the same information and keep it in your records.
You must itemize your deductions on Schedule A and use the regular Form 1040 to get a deduction for your laptop. You can't use the short form. List the total of your non-cash donations on line 17 of Schedule A. Then transfer the total from line 30 to Form 1040, line 40. If you are claiming more than $500 in non-cash donations, including the laptop, you also need to complete IRS form 8283. If you want to deduct more than $5,000 in donations of goods, you usually need an appraisal.
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