Are you perhaps not American? Here in America, tax deductions for property donated to charity are an almost universally condoned form of white collar fraud. Instead of using the actual price you could sell for, you come up with some flimsy justification for why it's actually worth 5 to 10 times as much, and then sign something claiming this which "allows" you to subtract that amount from your income.
Everyone knows it's almost always fraud, but practically no one is ever caught, so you feel like a chump unless you participate. It's taking advantage of a system with very poor enforcement. Professional accountants may even suggest it, and at times "appraisers" will play their part for a fee. Some people even try to convince themselves that it's technically legal, but I think even they know it's a lie.
When getting something appraised they actually ask you “is this for sale or insurance reasons?” This never made sense to me because the insured price should be the replacement price, and that should be the same as what you would sell it for, no?
It was much later that I realized “insurance price” was “the highest value we can justify” and really meant for tax purposes.
>When getting something appraised they actually ask you “is this for sale or insurance reasons?” This never made sense to me because the insured price should be the replacement price, and that should be the same as what you would sell it for, no?
Obviously no. Insurance has to buy you the item new, used items sell for a fraction of the new price. Being confused by this makes me think you're new to living on earth.
Insurance doesn’t buy you anything. You make a claim and they send you a check, minus the deductible. That is it.
Regardless, you typically want the list price for your items not the used price. Do you not understand the difference?
You get whatever price you insure at. If you want a higher payout, fine. You'll be paying higher premiums though.
With the current tax code in the US, a bunch of random Salvation Army donations or expenses for volunteer activities are mostly not very interesting unless you have much larger deductions as well. For specific relatively large value donations like cars, you'll typically have an independent assessment.
And that independent assessor will ask you “sale or insurance?” They are in on the scam.
In my case it was just a letter from the 501(c)(3) organization acknowledging the donation. I can't speak to how the valuation was done.
Goodwill or whoever has their own guidelines for how much they value stuff, presumably somewhat related to what they can sell it for.
Goodwill's system is that they give you pre-signed receipt and you fill in whatever you like.
That's not how it's supposed to work, but I won't claim that some of them don't do that.
The big one was cars which they eventually cracked down on, you can now only deduct what the charity sold it for (usually Pennies at auction).
I was actually surprised what a charity sold a car I donated to them gave me as a deduction. But it was when COVID was ramping up and used car values were stupid.