Although tax season is over, tax questions arise year round. Mr. MomonDealz is an experienced accountant and will be answering questions sent to him at [email protected] with the subject line “Ask an accountant”.
I donate from my stockplile quite frequently. When claiming these deductions, do I deduct what I paid out of pocket or what the items would normally cost without coupons/sales?
There are 2 schools of thinking for this question. One side says you do not get to deduct something you have not paid for (assuming the item is free after coupons). The other side is that you still get to deduct fair market value. Generally speaking, I agree you deduct fair market value. For example, on average, diapers are priced around $10. If you buy a pack of diapers but there is a sale, you have coupons, and you have store rewards (such as register rewards, etc) so your final price is less than $10, you can still deduct $10 since the value of the diapers did not change, despite how much you paid out of pocket.
*Please keep in mind this post is for informational purposes only and answers given are very general. Many things depend on individual circumstances. Please contact your personal accountant or financial advisor for your particular situation.