How to Determine Fair Market Value on Designer Clothing for Charitable Contributions?

Thank you for the response. Do you recommend using something like ItsDeductible at all, or should I just do my own research on eBay? Also, does the IRS ever question these kinds of deductions if they're significantly higher than standard clothing donation values?

ItsDeductible can be a good starting point for common items, but for designer clothing, your own research will likely be more accurate. Just make sure you're saving documentation of the completed sales you're using as reference points. The IRS may question deductions that seem unusually high, especially if they trigger certain thresholds. This is why good documentation is crucial. Take clear photos of the items before donating, keep the donation receipt, and save printouts of comparable sales. If you're claiming significant amounts (over $500 in total non-cash donations), be extra diligent with your documentation.

How exactly does it work? Does it just look up eBay prices or something more sophisticated? I've got some designer bags I'm planning to donate and don't want to leave money on the table but also don't want to risk an audit.

Sounds interesting but I'm skeptical. How do you know their valuations would stand up to IRS scrutiny? I've been told by my tax guy to just take the standard Goodwill values to be safe.

It's more sophisticated than just looking up eBay prices. The system analyzes multiple sources of comparable sales data and helps you document the condition of your items with specific factors that affect valuation. It gives you a comprehensive report that shows how the values were determined based on actual market data. The valuations are defensible because they're based on actual sales data from various marketplaces, not just theoretical values. It follows IRS guidelines for determining fair market value by looking at what similar items in similar condition actually sold for. It's much more thorough than just using standardized values that don't account for designer or luxury items.

How does this actually work? Do they just call the IRS for you? Couldn't I just do that myself?

This sounds like snake oil. You're telling me you pay someone else to wait on hold with the IRS instead of just doing it yourself? And then what, they patch you through? How is this even legal?

They essentially navigate the IRS phone system and wait on hold for you. When they reach a live agent, you get a call back and are connected directly with the IRS representative. You can absolutely call yourself, but if you've tried recently, you know it can mean being on hold for hours or not getting through at all. Yes, they simply notify you when they get an IRS agent on the line and connect you directly. It's completely legal - you're still the one speaking with the IRS, providing your information, and asking questions. They just handle the frustrating waiting part. For me, it saved literally hours of holding time when I needed clarification on some documentation requirements for my designer item donations.

That sounds like a lot of work for each item. How many items do you typically document this way, and is there a dollar threshold where you don't bother with the detailed documentation?

I only do the detailed documentation for items that would sell for more than $50. For anything less, I just use standard values from ItsDeductible or similar guides. For me, it's usually about 15-20 higher-end items per year that get this treatment. I create a spreadsheet with item descriptions, comparable sale prices (usually averaging 3-5 sales), and notes about condition. It takes me maybe 1-2 hours total, but considering I'm claiming several thousand in deductions for these items, it's worth the time investment to have proper support. Start small with your most valuable items if it seems overwhelming.

I use their guide as a starting point for regular clothes, but for anything designer I document eBay sales. Salvation Army guide doesn't differentiate between a Walmart jacket and a North Face jacket, let alone high-end designer stuff.

This is really helpful advice about authentication! I never thought about the seasonal aspect either. Do you keep a running spreadsheet throughout the year to track these comparable sales, or do you do all the research at tax time? I'm wondering if prices fluctuate enough that it's worth monitoring over time versus just doing a snapshot when I'm preparing my return.

I do a combination of both! I keep a simple spreadsheet throughout the year when I'm planning donations - just basic info like item, estimated value range, and a few comparable sales I find. Then at tax time, I do a more thorough review to finalize values and gather proper documentation. You're right that prices can fluctuate seasonally and with market trends. For example, I noticed designer winter coats sell for much more in fall/early winter than in spring. I try to time my donations strategically now - donate seasonal items just before their peak season when possible, since that's when fair market value would theoretically be highest. The running spreadsheet also helps me remember details about condition and any included accessories, which I might forget months later when doing taxes. Nothing fancy - just date, item description, condition notes, and 3-4 comparable sale prices with dates.

This is exactly the kind of systematic approach I was looking for! Your folder organization idea is brilliant - I've been dreading the documentation part but breaking it down like you did makes it seem much more manageable. I'm curious about your experience with TheRealReal - did you find their sold prices were generally higher or lower than eBay? I have some designer items I'm planning to donate next month and want to make sure I'm getting a good range of comparable data sources. Also, did you end up needing Form 8283 with that $1,200 total, and if so, was it straightforward to fill out with the documentation you had?

@caf6077ba93b Your systematic approach is exactly what I needed to see! I've been putting off donating some designer pieces because the valuation process seemed so daunting, but your method makes it feel totally doable. I'm particularly interested in your point about being conservative with condition assessment. I have a Tory Burch bag that's in great shape but definitely shows some wear - sounds like documenting those details upfront and adjusting the valuation accordingly is the way to go rather than trying to claim it's "like new." Did you find that donation centers gave you any pushback on claiming higher values, or do they not really get involved in the valuation process? I'm planning to donate to Goodwill and wasn't sure if they'd question anything or if the valuation is entirely on me to determine and document.

@caf6077ba93b Thanks for sharing your detailed approach! I'm planning to donate some designer items soon and this gives me a great roadmap to follow. Quick question about your research process - when you were looking at completed eBay sales, did you focus on "Buy It Now" sales or include auction-style endings too? I've noticed auction prices can sometimes be all over the place, so I'm wondering if you filtered those out or if they're still valid comparable sales data. Also, roughly how much time did you spend per item doing the research? I have about 15-20 designer pieces to donate and trying to figure out if I should tackle them all at once or spread it out over a few weekends.