How to determine fair market value for charitable donation of medical equipment (wheelchair)?

This is actually a common question when donating medical equipment. For tax purposes, fair market value is what a willing buyer would pay a willing seller when neither is under pressure. Since you've already researched similar items on marketplace sites, you're on the right track! When you don't have an exact comparable, the IRS generally accepts reasonable estimation methods. For medical equipment like specialized wheelchairs, a depreciation approach is perfectly acceptable. The standard depreciation for medical equipment typically ranges from 20-30% in the first year, then 10-15% annually after that. Given your wheelchair is 3 years old but in great condition, calculating 20% first year and 10% for years 2 and 3 would be reasonable. So starting with your $5300 purchase price: After year 1: $5300 - ($5300 × 20%) = $4240 After year 2: $4240 - ($4240 × 10%) = $3816 After year 3: $3816 - ($3816 × 10%) = approximately $3434 Keep documentation of your original purchase, your donation receipt, and your calculation method. Photos of the wheelchair showing its condition would also be helpful if the IRS ever questions your valuation.

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Something to consider with specialized medical equipment donations - the IRS actually has guidelines in Publication 561 "Determining the Value of Donated Property" that might help. As others mentioned, for items valued under $5000, you don't need a formal appraisal, but you should document how you arrived at your valuation. The publication specifically mentions that when comparable sales aren't readily available, other reasonable methods can be used. One approach I've used is contacting the manufacturer directly and asking what percentage of value they estimate their equipment retains after X years of normal use. Many medical equipment manufacturers have this data and can provide general guidance (not as a formal appraisal, but as information about their products). I did this with a CPAP machine I donated and the manufacturer said their products typically retain about 40% of value after 3 years of use.

Don't forget about condition when determining FMV! The IRS expects the value to reflect the actual condition of your item. New in box > excellent > good > fair > poor. Since your dad's wheelchair is in "great working condition" as you mentioned, you'd probably be in the "excellent" or "good" category which would justify using a more favorable depreciation rate. Take detailed photos showing the condition in case you're ever questioned. Also remember the IRS threshold for requiring Form 8283 is only $500 total for all non-cash donations for the year. And if your donation exceeds $250, make sure the charity's receipt includes the proper language stating no goods or services were provided in exchange.

As someone who works in healthcare administration, I wanted to add that specialized wheelchairs like tilt chairs often have better resale value than standard wheelchairs due to their specific features. The tilt mechanism and specialized seating systems are expensive components that retain value well if they're still functioning properly. Since you mentioned it's barely used, I'd lean toward the higher end of the depreciation calculations others have provided. You might also want to check with local durable medical equipment (DME) suppliers - they sometimes buy or consign used specialized equipment and could give you insight into current market values, even if they can't provide a formal appraisal. Also, don't overlook checking completed sales on eBay rather than just current listings. The "sold" listings will show what similar chairs actually sold for recently, which is better data than asking prices on Craigslist or Facebook Marketplace.