If I make a purchase at a Goodwill or Salvation Army store, is that considered a tax deduction since the proceeds go to charity?
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Andy Ninja Is Wicked Back To Work
ANSWERS: 4
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This would depend on a number of circumstances, including where you live. It's a good idea to check your government's taxation website. In Australia, you can't claim a donation if you get goods in return. I *believe* that in the US you can claim the difference between your donation and the fair market value of the goods you got: ie. if you give a charity $100 and they give you some token gift/goods worth $10, you can claim the remaining $90. Of course, I've never paid close to 'market value' at a Salvation Army Megastore ($2 shoes?), so presumeably no portion could be claimed.
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Concerning US law: the previous answer is correct, but should be clarified -- "if you give a charity $100 and they give you some token gift/goods worth $10, you can claim the remaining $90. Of course, I've never paid close to 'market value' at a Salvation Army Megastore ($2 shoes?), so presumeably no portion could be claimed." The case of a purchase from a Salvation Army Store is very different from a donation to the Salvation Army and receiving a gift for the donation. The 'market value' of the items in the Salvation Army Store is the price at which the products sell. So, if you buy a $2 pair of shoes, regardless of what intrinsic value the shoes might (or might not) have, you have received a $2 pair of shoes for $2 -- providing for no charitable contribution.
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Generally, unless you pay more than the fair market value of an item received, you can not claim that purchase as a deduction because you receive goods or services in return for your "donation". If you donate goods to a not for profi agency, you can claim a deduction on federal taxes. If your goods ar valued at more than $50.00 at "thrift store value" it would be a good idea to get a receipt and makke a reasonable effoer to record the amount and type of goods donated. Also, yopur mileage driving too and from the donation center, could qualify as a deduction also.
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In Canada, no. Any such purchases are considered a regular sales transaction. People who donate to these charities may request a tax receipt for a charitable donation, based on the value of the items donated. If these donations are then sold for profit, any revenues are considered income for the organization and not gifts to charity.
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