We get this question at least half a dozen times every year.

“I have this old “thingamajigger” that I need to get rid of. It still has some value - should I sell it, or donate it?”

So, some advice before you decide:

Be honest - What’s it actually worth to someone else? You bought a Blu-Ray player 3 years ago for $250 - what’s that machine worth today? Really? You could say that it “should” be worth $100, but realistically, how big is the market for a used blu-ray player? Does selling this on Craigslist, or eBay seem worth it? What about a consignment store? How much of your time are you going to invest in trying to sell something that's only worth $35? Will you have to borrow or rent a truck just to go sell the thing? Does that make sense?
Are you truly interested in being charitable, or are you just trying to maximize the benefit to you? If you’re interested in being charitable, then sure - donate away. If you’re trying to maximize the amount of money still in your pocket, then the answer is: Sell, Sell SELL! Why you ask?

Charitable giving is nearly always worth only a % of what you donated when it comes to tax time. Churches obviously provide you with intangible spiritual benefits, and of course donating to Habitat for Humanity, Goodwill, or the Center for Women and Families will give you the knowledge of the cause that you’re helping. But as far as financially - if you donate $100 to your church, you will only save a fraction of that in taxes. Maybe you’re in the 22% bracket for Federal, and 6% for KY - You “might” save $28 dollars in taxes.

This works the same as when you donate stuff. You have a bag of clothes worth $100. You donate the clothes to Goodwill. The value of that donation to you ultimately? $28.

If you know a buyer who will PAY you $100 for that bag of clothes that’s worth $100 - why aren’t you selling it? $72 more in your pocket!
What about my old truck? I always hear commercials about donating your vehicle. Ok - here’s how this works. When you donate your truck to NPR, or Goodwill, or whatever - that charity is almost always turning around and selling that truck at auction. These charities don't want the liability of driving around in your old beater. After they sell the truck for $900 at auction, (which is slightly better than the $500 CarMax offered you for the vehicle, because they were going to sell it at auction too) - you still only get to see maybe a fraction of that $900. If you were in the very top federal tax rate of 37%, and again 6% more in KY - that’s still only 43% of $900, or $387. You should have taken Carmax up on their offer of $500. Less paperwork too, because...

You’ll get a form from the charity later telling you that they sold the truck for $900 - this is the value that they’ve reported to the IRS. The IRS is supposed to match up your donation with this record and make sure that you don’t value a $900 vehicle at $3,000.

But - what about the charities? Hey, don’t look at me! You’re the one trying to get the most money back in your pocket! If you’re being charitable, then be charitable! Give it away! Being charitable isn’t about taxes - being charitable is about helping the cause - the tax savings is just a little nudge to make it a little easier, that’s all! It’s not WHY you donate!

Warning - there’s still a lot more to all of this that we haven't covered - these are generalities. Call us to talk about what you want to donate, how it could be sold, and whether it’s worth the trouble! Also - this does NOT cover donating investments or securities - that's a totally different animal, with totally different incentives at work.