I believe the rules ask the question whether the items donated will be
used by the donee or whether the donee will turn around an resell them.
So, if you donate recordings to the local library or thrift shop, you
may take off what they would resell it for. It varies: some libraries
sell CDs for $1, others for $2, and even $4. Try to find $4 places.
But if the donee is going to add the items to its permanent collection,
the value is higher. I took off $12 for CDs from the specialist labels,
like Biddulph and Pearl and for certain CDs from the major labels that
have gone out of print.
Up to $500, the IRS doesn't ask questions. Indeed, you can put old
clothes in one of those ubiquitous bins and, IF YOU WISH, write the
charity and ask for a receipt. These receipts often just say "books,"
"CDs," or "clothing," will no further specification.
The IRS does not care about such small potatoes.
If it's between, $500 and $5000, the gift must be for the use of the
institution. (You have to say so on your tax return.) I took off $4900
for CDs and a few books and other music things that went to the
VanderCook College of Music in Chicago. You can go onto their website,
then to the library, and put in my name. That's for the CDs. The LPs
didn't get put into the catalog, but I kept a careful list.
I also donated about twenty boxes of good, solid academic books to
Milligan College, a small Christian liberal arts college in Tennessee.
They send, send 'em. If we don't add them to our own library, we can
send the others to any of several libraries in our network of like
colleges. (They have three of the four best-selling "new atheist" books
(Dawkins, Hitchens, Dennett, Harris), which may surprise you, but not
me.) I typed up a list and used the lowest price found on
http://bookfinder.com. It was quickly obvious that I would exceed the
$5000 limit, so I took off $4900 also.
This year, I am sending books to the Washington Consortium of Research
Libraries (about twelve of them. U of MD is not among them). I am seeing
whether at least one library has the book, using an online catalog
called Aladin. If it does, any library that doesn't have the book can
enter it quickly, since the basic cataloging has already been done. I am
putting on stickers saying which library has the book in question. (I
have yet to find a book of mine that all the libraries have.) SO--the
books goes first to Georgetown. Georgetown will take out the books it
wants and put the remainder on a truck that sweeps through all of them
daily to the next library. And so on. I'll use the Bookfinder price for
BUT, if the donation exceeds $5000, you need to pay out of your pocket
for a professional appraisal. I have no idea what the ratio of what the
appraiser would give you to the amount the appraiser would give for IRS
purposes is, but I think for sound recordings it would be on the order
I have used TurboTax for many years. It not only speed up the process
and finds ways of saving taxes I didn't know about, but it also gives
you an estimate of your chances of being audited. I deducted about
$15,000 for a $100,000 family income. TurboTax said the chances are low.
If I should get audited, I'd have to bring in Canfield's Guide and other
sources, together with my list of donated material, and speak with an
IRS auditor, who almost certainly will know far less than I do about the
value of used recordings, which will be true of practically everyone on
If he disallows parts of the deduction, I can either challenge it or
just shell out some money to make up the back taxes, plus maybe a
penalty of (I think) about 10%. The calculation on what to do is
subjective, as is almost every risky activity:
Amount I claim × my tax bracket × probability of audit
(greater of (Amount I could get from a dealer) and (amount I could get
by selling the item on Amazon or eBay - the hassle)
IS >0, then donate it.
The other risk is being found guilty of criminal tax evasion. Then you
have to shell out the back taxes and pay a fine or (if you are one of
about 200 people) go to jail.
The fact is the IRS does not care about people in my financial
condition. It costs the IRS too much to go out after me. The IRS's
calculation is additional revenue minus cost of getting it MINUS the
augmentation of the ill-will huge numbers of the public feel about the IRS.
I don't know what the incomes of those on this list are. What I do know
is that we often put collecting far ahead of earning money. The late Don
Hodgman earned much more than I did as a municipal bond lawyer in a
prominent firm. He earned enough to support his family well AND to
pursue his hobby. (A hugely disproportionate number of us are unmarried.
(By the way, the late Allen Mackler was once married, but his wife wound
up telling him that it was her or his record collection. "And my
collection wasn't nearly the size it is now!" he exclaimed.)
It was clear in talking with Don, who once took Sarah and myself to a
quite ordinary restaurant for lunch in mid-town Manhattan, that he
plainly was not interested in talking about, or even describing, his work.
My advice: Donate to as many different places as you can, preferably to
small schools and colleges that would like to improve their collections.
And DON'T worry about the IRS.
On 9/5/2012 4:50 PM, Peter Hirsch wrote:
> Yes, Steve. That was the whole point of the forwarded message. Jerry
> definitely will come with a truck and take them off your hands, though
> I don't know his range. I suppose that the more you have to give the
> farther he would be willing to drive.
> If you want to follow the advice of the two Steves or anyone else, you
> may or may not try to take a tax deduction for it, but I wasn't
> suggesting that be your motivation.
> My best,
> On Wed, Sep 5, 2012 at 4:14 PM, Steve Ramm <[log in to unmask]> wrote:
>> I agree with Leroy 100% and I'm a CPA.
>> There is a category of valuation called "Thrift Shop value". I've got a
>> fancy thrift shop that charges $4.00 for all used Cds. And that's the value I
>> Also, remember Peter wasn't suggesting that you make lots of money. I think
>> we all have tose Lps that we take to the curb. If you are near the store,
>> you could drop off. If you live in the area and there are a lot you don't
>> need, I'll bet the guy would pick up.
>> BUT, seriously, the posting was only for those in Northern Calif. and no
>> need to get too involved.
>> Ste0ve Ramm