How to Determine the Value of Used Office Equipment and Furniture

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If you sell off old equipment, it's worth whatever anyone wants to pay for it. If you donate old office furniture or equipment to charity, however, setting a value is trickier. The IRS says you can take a tax deduction equal to the fair-market value of your in-kind charitable donations. Usually this works out to less than what you paid for the items.

Purchase Price

If you bought your office furniture recently, you may be able to claim the purchase price as the value of your donation. If the furniture's 10 years old, though, don't try telling the IRS it's worth as good as new. Even a recent purchase price may have to be adjusted down if it wasn't an "arm's length" transaction. For example, if you bought from your brother's furniture store and paid him above the going rate, the IRS doesn't consider that an arm's length deal.

Sale Price

Suppose the charity turns around and sells your donation in an arm's length transaction of its own. You can probably claim the sale price as the value of the your donation. If you're donating, say, a couple of office laptops, you can research the value of similar used computers. Suppose similar laptops routinely command a $500 price, used. That gives you grounds for claiming that as the value of your donation.

Wear and Tear

Over time, chairs, computers and other office equipment get stained, wear out or break down. That's why the IRS won't allow you to claim purchase price if you've owned the item a while. If you're giving away a chair with a broken leg or something equally worthless, forget it. The IRS says furniture has to be at least in good used condition or there's no write-off. Goodwill defines a "good used" item as one you'd be comfortable giving to a friend.

Proving Your Case

If you donate a piece of equipment or a collection of furniture worth more than $5,000, you'll have to prove it. The IRS wants confirmation from a qualified appraiser when in-kind donations get to that level. With smaller donations, the IRS doesn't require an appraisal: you can determine the fair market value yourself. Your records should include the original purchase price and how you set the value -- if the IRS ever audits you, that paperwork will come in handy.

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About the Author

A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.

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