When remodeling or demolishing a house or business, some people overlook the benefits of a charitable donation. Many architectural elements and fixtures can be salvaged and donated to receive a tax deduction.
Although it is probably a great way to relieve stress, think before you take a sledge hammer to the cabinets or tub. Many non-profits will even come pick up your items.
Here are just some of the items that can easily be donated and deducted:
- Light Fixtures
- Sinks, tubs, toilets
- Washer and Dryer
- Ovens and stove
- Crown molding
- Carpentry trim
- Garage Doors, frames, motors
Once you have a list of your items, now what?
Take pictures of the object before removal and note the condition of the item. A picture and list of the items will go a long ways to give substance to your deduction. If your deduction is going to amount to more than $5,000, an appraisal must be completed to substantiate your deduction. If any one item is worth more than $500 and in poor condition, an appraisal must also be completed.
When choosing a non-profit to donate your items, choose one that’s mission is geared towards accepting these types of donations (Tax Reform Act of 1986). Non-profits across the country either resell the donated items to builders or consumers or use the items directly in their builds. Non-profits that are accustomed to receiving these types of donations can also stretch your donation much further than a random non-profit.
The first deconstruction appraisal I did was over a year after the initial deconstruction. With pictures of the rooms and a list of items donated, the owners were able to give me enough information to write an appraisal. The non-profit agency actually suggested that they find an appraiser to walk them through the process of a non-cash charitable deduction. If it was not for that suggestion, the home owners would have walked away from thousands of dollars of charitable donations.